Mortgage & student loan payments: What homebuyers should know
It's common for homeowners to have both mortgage and student loan payments simultaneously. But how does student debt affect your chances of getting a mortgage in the first place?
While lenders consider all debt obligations in loan approval, you can still buy a home while paying student loans.
Do mortgage lenders care about student loans?
Lenders consider your current financial obligations, including any outstanding loan balance, in your financial statement.
Your debt to income ratio, or DTI, measures your ability to make regular loan payments, so if your student loan payments skew your DTI too much, it could be a red flag to lenders.
Can I still get a mortgage?
While mortgage lenders consider your debt-to-income ratio for mortgage approval, you don't have to be completely debt free to get a mortgage. So, you can have student loan debt and still get a mortgage!
Should I pay down my loans before buying a house?
Student loan debt won't keep you from mortgage approval, but it can make it harder to qualify. If you have reliable income and a good payment history, it's not necessary to pay off your existing debt before buying a house.
Just remember to consider the monthly student loan payments and your homeowner costs. Multiple loan payments add up quickly.
So, it’s harder to buy a house as a student loan borrower?
It's not necessarily harder to buy a house as student loan borrowers.
But regular student loan payments with regular mortgage payments can be expensive, so be careful to stay on top of your payments.
Student loan payment assistance programs may help with federal student loans, such as income-driven repayment plans. So explore all your options if you run into a hardship.
About the Author
Cheryl Pendenza - Realtor®/Broker Associate
Bringing more than 30 years of experience to the table, Cheryl has a paralegal degree, banking background, and is a member of many professional, civic, and community organizations.
Qualified • Experienced • Skilled
"As a full-time REALTOR®, I am dedicated to providing my clients with a high level of service by building relationships, marketing, and negotiating on their behalf. As a homeowner, I realize how important homeownership is.
Cheryl brings warmth and compassion to her client relationships and referrals have become the backbone of her business. "I’m grateful for every referral and welcome the opportunity to help clients achieve their real estate goals.”
Cheryl Pendenza, Broker Associate affiliated with RE/MAX Andrew Realty Services since 1999 is a local businesswoman and formidable negotiator who can help you achieve your real estate goals. Supporting family, community and local business is important to Cheryl and she can often be found at one of the local restaurants, shops, or galleries.
