Do you have your heart set on buying a home, but have concerns that your student loans may be impeding your ability to make that dream become a reality? Even though having student loan debt can substantially impact your financial status, it does not necessarily have to stop you from becoming a homeowner. If you owe money on student loans and are interested in buying a property in Palm Beach, Tri-County, and Broward County, Florida, CTC Mortgage is here to help. Continue reading to learn more about purchasing a property while owing money on student loans.

How Does Having Student Loan Debt Impact The Ability To Purchase A Home?

Since student loans involve borrowing and paying back money, they will have implications when you buy a home. When you apply for a mortgage to help finance a property, a lender will evaluate your credit score; if you have a consistent history of making your student loan payments on time, it will have a positive impact on your credit rating. On the other hand, if you skipped student loan payments or were late on your payments, your credit score will be lower, which could negatively impact your eligibility for a home loan. Student loans will increase your debt-to-income ratio, (DTI), which measures your debt compared to your monthly income, and subsequently make it more difficult to qualify for a loan and impact your mortgage rate. Additionally, if you still owe money for your student loans, it will be more challenging to afford your monthly mortgage payments, as well as make it more difficult to save up for a down payment on a home.

How To Increase Your Likelihood Of Getting Approved For A Mortgage With Student Loans

There are still steps you can take to become a homeowner, even while having student loans. Some ways to improve your chances of getting a mortgage with student loans include:

• Decrease your student loan debt – You can take steps to reduce the amount you owe on your student loans by refinancing them or opting for an income driven repayment plan in order to help increase your monthly income.
• Review your credit rating – It is important to attempt to improve your credit before you apply for a mortgage so that you can be eligible for a better term and rate. Make sure that you pay your credit bills on time, keep older accounts that you no longer use open, and check your report for any fraudulent charges or other errors.
• Lower your debt-to-income ratio – Since having a DTI makes it more difficult to qualify for a mortgage, make a point to pay off your current debt, especially balances with higher interest rates, and consider boosting your income with a second job.

If you are interested in purchasing a home and have student loans in Palm Beach, Tri-County, and Broward County, Florida, CTC Mortgage, contact CTC Mortgage today for a consultation.

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