It’s an issue that
haunts millennials and often keeps them from buying homes of their own. Between
the mortgage application, credit checks, and the sheer cost of the new home, is
it possible to buy a new home while you’re still paying off student loans? The
truth is, of the more than 44 million student loan borrowers in this country,
most under the age of 40, many managed to buy houses of their own even with
their student loan. Student loans do present a challenge, but not an
insurmountable challenge. Here’s what you need to know about buying a home with
student loan debt and how to make it work for you:
Yes,
You Can Get a Mortgage
The biggest concern
is mortgage loans. There’s a popular misconception that those with student loan
debts won’t be able to get approved for a mortgage loan, and that leads to many
with student loan debts settling to rent a home instead of buying. However, the
truth is that people with student loan debts get mortgage loans all the time.
Mortgage lenders look at monthly debt commitments to see if you can afford to
take on another monthly payment. The overall size of your debt is less likely
to be taken into account.
Get
Rid of Other Debts Where You Can
It is possible to
get a mortgage while you have student loan debts, but you may want to cut back
on other debts. For instance, if you can pay off your hospital bills or car
payments before applying for your mortgage, that will only help you to look
better to the lender. One of the biggest offenders when it comes to unnecessary
debts is a credit card. It might seem convenient in the moment, but often it
can become more expensive than it’s worth. If you want to really get yourself
in financial shape before applying for your mortgage, pay off your credit card
debts and then cancel it.
It’s
About Timely Payments
Sometimes it’s not
the size of your debt that stands out to mortgage lenders, but rather how often
you make payments on time. After all, in today’s economy, almost everyone is in
debt in some way or another. What’s important is how you handle that debt. If
you pay your student loans on time every month, that tells mortgage lenders
that you’re more likely to make your mortgage payments online. Making payments
on time boosts your credit score, and that looks great to potential mortgage
lenders.
Consider
Adjusting Your Payments
If you’re
struggling to make timely student loan payments, or you think adding monthly
mortgage payments to the mix will tip you over, you’re probably paying too much
per month for your student loans. Consider contacting your federal student
lender about switching to an income driven repayment plan. These repayment
plans are adjusted every year, based on the previous year’s taxes. They allow
you to pay a manageable amount based on your income, so you have more room for,
say, a mortgage.
Your College Station realtor can discuss different
options with you when it comes to buying a home while paying off your student
loans. The prospect might seem daunting, but with the right financial choices
and timely payments, you can find a great starter home, even with student debt.
House For Sale in College Station
| Sarah Miller, your RE/MAX realtor bryan-college station can help you discover a lot of great tips for making a profitable sale of your home. Call Sarah Miller at 979-255-1904 for your real estate needs in Bryan-College Station and the entire Brazos Valley! Sarah Miller, Associate RE/MAX BRYAN COLLEGE STATION 3030 University Dr East Ste 100, College Station, TX 77845 License #: 500065 |
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