Buying A Home When You Have Student Loans

Are you ready to become a homeowner, but concerned that you won’t be able to afford it due to owing money on your student loans? Even though having debts from student loans can greatly impact your finances, there are still options to help you purchase a home, even if your student loan debt has not been paid off yet. If you currently have some debt, and interested in purchasing a property in West Palm Beach, St. Pierce, or Tampa Bay, Florida, CTC Mortgage is here to help. Continue reading to learn more about buying a home when you have student loan debts.

How Can Student Loan Debt Impact The Purchase Of A Home?

Owing money on your student loans can significantly impact a borrower’s ability to buy a home. When you apply for a mortgage, a lender will evaluate your credit report. If you have demonstrated that you have consistently made student loan payments throughout the years, your credit score will be higher. However, any late or missed student loan payments will cause your credit score to be lower, which impacts your home loan eligibility to buy a property. In addition, student loans may increase a borrower’s debt-to-income ratio, (DTI), which is another factor used to determine what type of mortgage you are able to qualify for. Owing money to student loan debt can also make it more challenging to save up for a down payment and closing costs when buying a home, as well as present challenges to affording a monthly mortgage payment. Despite these obstacles, however, it can still be possible to buy a home with student loan debt.

How To Get Mortgage Approval With Student Loan Debt

Even if you have student loan debt, there are still opportunities to become a homeowner. Some ways to help increase your chances to buying a home include:

• Reviewing your credit history – There are steps that you can take to improve your credit score before you apply for a home loan. Some ways to do this include: making consistent payments on time, keeping old paid off accounts open, and checking your account for any errors or fraudulent charges.
• Decrease your debt-to-income ratio – Your DTI compares the amount you owe each month toward debt to your overall monthly income. Having a high DTI can make it more challenging to qualify for a mortgage; therefore it is important to pay off your current debts first (credit cards, car payments, etc.) in order to reduce the overall amount you pay for your monthly debts.
• Lower your student loan payments – It may be a good idea to lower the amount you pay each month for your student loans by refinancing, consolidating them, or switching to an income-driven repayment plan to help free up finances each month.

If you have questions about buying a home while still owing student loans in West Palm Beach, St. Pierce, or Tampa Bay, Florida, contact CTC Mortgage today for a consultation.