Buying a house is a major financial and life decision. However, it’s not a decision that many millennials feel like they can make because of student loan debt.
According to a survey done by Student Loan Hero, 41% of college-educated millennials have postponed purchasing a home due to student loan debt. What many millennials may not realize is that having student loan debt won’t necessarily keep you from buying a house.
Here’s what you need to do to get a mortgage with student loans:
- Improve your credit score.
- Pay your bills on time. Don’t close old accounts. Use different types of credit. Show lenders that, although you have debt, you are handling it well.
- Decrease your debt to income ratio.
- Many lenders suggest that no more than 36% of your gross income goes towards paying off debt. Reduce your debt to income ratio by either paying down some of your debt or increasing your income with a second job or asking for a raise. You may also be able to refinance your student loans to obtain a lower monthly payment.
- Consider down payment assistance programs.
- Many cities, states, and lenders offer down payment assistance programs. You may also qualify for an FHA loan or USDA loan, which require low to no down payment. It’s important to research your options and speak with an experienced mortgage broker before deciding what program is best for you.
Before you take the plunge, make sure you are ready to buy a home. Review your priorities, consider what matters most to you, and plan accordingly. If you have a plan, there’s no reason you can’t buy a home with student loan debt.
Ashley Wilson Realty Group has an entire team of agents and preferred lenders who would be happy to help you decide if you are ready to purchase a home. Call us at 919-378-1974 or email info@wilsonrealtygroupnc.com for more info!