Can I Buy A Home with Student Loan Payments?

 

Millions of students across America are struggling to repay their student loan debt and student debt ranks as the second-highest consumer debt category, with only mortgage debt being higher. It’s also the fastest-growing segment of U.S. household debt, having grown nearly 157% over the past 11 years. It’s a trillion-dollar problem in the U.S. and it keeps growing.

Most student loans in general are federal student loans that you took out while attending college however there are some private student loans backed by banks, credit unions, etc.  At the time, it sounded like a great option to help with school expenses or being able to attend college at all. They don't tell you the pros and cons when you apply and you certainly didn't understand the ramifications to your credit in the future if you couldn't pay the payments once you graduated.  

A federal student loan is a federal debt that will NEVER go away. With that said, those student loans will need to be in good standing to buy a home. Old loans, late payments and missed payments can be overcome, but student loans in collection will have to be resolved and put back into repayment status. 

Student loans don't affect your ability to get a mortgage any differently than other types of debt you may have, including auto loans and credit card debt. Most loan programs have a debt-to-income (DTI) limit. DTI is the main factor lenders use to determine how much they are willing to let you borrow, and student loans are part of that assessment. This includes your current monthly debt payments and your future mortgage payments. Check out your buying power with our new tool!

Good News! For student loans not in active repayment (forbearance, deferment, income-based repayment plan), the guidelines state we use 1% to 1/2% of the unpaid balance unless you have an actual payment that is being reported on your credit report. 

Student loan debt can be a drag, especially if you’re trying to buy a house. Fortunately, there are options. By taking advantage of the right loan programs, working on your credit and DTI and teaming up with the right partners, you can improve your chances significantly, not to mention lower the cost of buying a home both up front and for the long haul.

Contact us today to see if you can qualify to buy a home even with your student loans! 

Check out our pre-qual tool!

Aundrea Beach-Greco 

Mortgage Lender, CMPS 

NMLS 333739

📱 +1 702-326-7866

📧 info@aundreabeach.com

🌐 www.AundreaBeach.com

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Aundrea Beach-Greco, CMPS. Licensed Mortgage Loan Officer. NMLS 333739

702-326-7866 info@AundreaBeach.com

Find me online www. AundreaBeach.com

Apply online at www.iLendLasVegas.com