Student Loans and Homebuying

According to StudentLoanHero.com, you can get a mortgage loan, even with high student loan debt. It’s all in how you manage the three most important factors in getting loan approval: 

Down Payment: Twenty percent of the purchase price of the home is the benchmark down payment, but it’s possible to get a loan with a down payment as little as 3% such as the Fannie Mae HomeReady™ mortgage. Down payments can be gifts from parents, from your savings, or from state and local down payment assistance programs. No-down-payment loans for veterans are available from VA.gov and rural community loans from USDA.gov.

Credit Scores: Quickenloans.com says the minimum credit scores you need (between 580 and 620) depend on the type of loan you want. VA loans don’t require credit scores, but the private lenders who make the loans do have minimum credit score requirements, usually 580.

Debt-to-Income ratio: Debt-to-income (DTI) ratio means how much debt you have as a percentage of your income. Most lenders believe you should have no more than 28-31% of your gross monthly income put toward housing costs. Your total debt service should be no more than 10-13% of your gross monthly income. To lower your debt, start making higher payments to reduce the amount of credit card debt you have. You can also refinance your student loans to lower the payments, but be cautious about refinancing federal loans as you’ll lose certain protections like loan forbearance, loan forgiveness and income-based payments.

Other Articles

Figurines of an elderly couple at home on a background of money.
Figurines of an elderly couple at home on a background of money.
Finance

Home Ownership Hedges Against Inflation

There are so many benefits to owning real estate – building equity, tax advantages that don’t exist for other asset classes, not having to pay rent, passive income from rental properties, and many more.

Packing boxes close-up
Packing boxes close-up
Seller & Buyer

Packing For Your Move

Deciding what to pack when you’re moving isn’t easy. If you follow our simple tips and suggestions packing to move and unpacking to move into your new home will be much easier.

million dollar house in las vegas
million dollar house in las vegas
Seller Advice

Selling a Second Home

It’s tax time and you may have questions if you own a second home and sold it or plan to sell it. Do you have to pay capital gains when you sell a second home? That all depends...