How To Get A Mortgage With Student Loan Debt

Time Magazine reports that the Student Loan Crisis is worse than ever.  More than 25% of students are graduating with too much student debt and the overall debt number has exceeded the $1 trillion mark.  While this issue may not seem related to being a homeowner, it is affecting the housing market in surprising ways.

When you apply for a mortgage, student loans can be the make or break factor for getting approved.  If you have student loans and are looking to buy a home, you’re in luck! Follow our advice for affording a mortgage while balancing student loans:

Managing Loans

If you are paying a high interest rate on your student debt, it may be time to look into refinancing and consolidating.  Refinancing your student loan reduces your debt-to-income ratio, lowers your monthly payment, locks in low interest rates and improves your chances of being approved for a mortgage.

Elevating Credit Score

How can you build good credit?  If you have student debt, one of the most effective ways to improve your credit score is by paying off loans.  Start by paying your student loans on time each month and make sure you keep your monthly balances low.  If you avoid paying off your balance each month, you might be faced with a fee.  

Reduce Your Debt

Lessening your total debt sounds harder than it is.  If you are ready to purchase your first home, cutting back on monthly expenses is a great place to start.  Reduce your living expenses by eating out less, avoiding online shopping or even taking on a part-time job for some extra cash.  All it takes is some money management and you can be a homeowner!

Don’t let student loans affect your ability to buy a home.  Contact the professionals at Three Rivers Association of REALTORS® for professional advice!  It is our goal to provide real estate solutions for those in Will & Grundy County.  For more information, head over to our website or give us a call at 815-744-4520!