Will Student Loans Affect Your Mortgage?
While there is a lot of negativity regarding the amount of student loan debt piling up in the U.S. the news isn’t all bad. Student loans are a valuable asset and have the potential to produce great rewards such as higher income and higher homeownership rates.
While student loan debt will affect your debt-to-income (DTI) ratio, staying on top of your payments each month will help to boost your credit score. Your DTI is a key factor in qualifying for a mortgage. If you have over 50k or pay more than 10% of your monthly income in student debt then your chances of owning a home could be at risk.
However, there are things you can do to lower your payment such as refinance or consolidate your loans. If your loans are preventing you from purchasing a home you may need to take some time to focus on budgeting or take on a part time job to get your debt down first.
Even if you think you’re carrying too much debt to qualify it doesn’t hurt to get a professional’s opinion. I would be happy to go over your situation to see where you stand and get you on the path to homeownership.