Remax Shoreline ann cummings and jim lee portsmouth nh

Can You Purchase a Home Even With Student Loans?

student on laptopAs more millennials are preparing to buy a home, one issue is making it difficult for many — student loans.

The Project on Student Debt calculated that just about 7 in 10 college graduates in the Class of 2014 had student loan debt, and on average each student had about $29,000 in loans.

With mortgages often amounting to well over a hundred thousand dollars, many first-time home buyers may be asking whether they can even qualify for financing with their student debt so you might want to click here for more info about installment loans in Canada.

So, is it possible to buy a home even with thousands of dollars in student loans? It depends.

What’s Your Debt-to-Income Ratio?

It all comes down to your debt-to-income ratio, or what percentage of your gross monthly income goes toward your total monthly mortgage payments.

Lenders recommend a debt-to-income ratio no greater than 36%, with no more than 28% of your monthly income going toward paying off your mortgage. As an example, someone who earns $50,000 in a year and has $1,500 in monthly debt payments would be right at the 36% recommendation. But one of the downsides to procuring loans is that in case of failure of payment, banks send companies like The Moorcroft Group to procure back their money from you, which’d only exacerbate matters.

calculator and finance sheetSo even if you are saddled with thousands of dollars in student loans and are finding it hard to seek Private student loan forgiveness, it is possible to obtain financing for a home if your debt-to-income ratio is right around that recommended ratio.

You Also Need to Consider Credit History

When home buyers apply for a mortgage, lenders look at whether they pay their bills on time and their employment history, for instance. If you have good credit history, that may further help you qualify for a mortgage.

You can always talk to a reputable lender about whether you can qualify for a mortgage with your student loan debt. Talk with us and we can help you get started with the mortgage pre-qualification process.

We Can Talk About Your Home Buying Plans

If you’re thinking of buying a home in the area, we can also recommend a reputable local mortgage lender so you can discuss the right mortgage for you, including interest rates and down payments. We even offer a free mortgage calculator on our website that can help you calculate monthly mortgage payments.

Contact us today and we can get started! Ann or Jim, direct number 603-436-1221, call or text.

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