Dreaming of trading in rent payments for a mortgage? Holding off because of your student loan debt? You may be able to buy a home sooner than you think.
The Reality: Many Buyers Have Student Loans
Having student loans doesn’t automatically disqualify you from homeownership. In fact, 38% of first-time buyers had an average of $30,000 in student debt, according to the National Association of Realtors.
While balancing student loans and a mortgage payment can seem daunting, lenders understand this is the new normal. As a steady source of income is usually the key factor, there are loan programs that can make buying a home possible despite your student debt burden.
How Student Loans Impact Your Mortgage EligibilityWhen you apply for a mortgage, lenders will look at your:
- Credit score
- Debt-to-income ratio
- Downpayment amount
- Employment history
Your student loans factor into calculations for your debt-to-income ratio. But having solid income and a good credit score can help offset higher debt levels.
Take the First Step Toward HomeownershipDon’t assume your student loans mean years of delayed homeownership. The best way to understand your options is to discuss your unique financial situation with a trusted lender.
They can:
- Evaluate your current debt levels
- Explain different loan program requirements
- Estimate what home price you may qualify for
You may be surprised at how close homeownership could be! The only way to find out is to take that first step.
The Bottom LineWhile paying off debt is ideal, you don’t necessarily need to be debt-free to buy a house. Let a lender run the numbers so you can make an informed decision about pursuing homeownership now or waiting.