Every time you turn on the news these days, you hear about the “Student Loan Crisis.” There’s constant chatter about student loans and the fact that so many individuals are accruing a substantial amount of debt due to school loans is “the next big threat to the United States economy.” To be honest, this is very frightening to consider. But if you are one of the millions of people in the United States inundated by student loan debt, you certainly know how daunting it can be to face the prospect of student loan debt payments every month for the next 10 or 20 years.
But should your student loan debt preclude you from owning a home? It depends on who you ask. But I’m here to tell you that even if you have student loan debt, you can still become a homeowner. In fact, if you can qualify for a mortgage and purchase a home, you will be the owner of an asset that will likely appreciate over the course of many years.
Student loans do not necessarily have to be a barrier keeping you from owning a home. When applying for a mortgage, your credit will be assessed. Also, your ability to make a down payment and your debt-to-income ratio will be evaluated. The interest rate you are offered on a mortgage will be affected by all of these numbers. But don’t be discouraged. It is still possible to qualify for a mortgage when you have student loan debt.
What’s the Most Important Thing To Remember?
Probably the most important thing to remember when you have student loan debt and you want to apply for a mortgage so you can purchase a home is that your loan payments must be made on time. If you’ve consistently paid your student loan payments late or not in full each month, this may hurt your chances of qualifying for a mortgage with a desirable interest rate.
Should You Wait Until all Student Loans are Paid in Full?
If you are the type of person who wants to be completely consumer and student loan debt-free before purchasing a home with a mortgage, then that is certainly your prerogative. But if you are trying to decide whether you should pay off your student loans OR purchase a home, the answer might not be so easy and can depend on several factors. Remember, when you have a mortgage, you are able to deduct your mortgage interest on your federal tax return. This benefit alone might make homeownership very attractive. If you are currently paying monthly rental payments, you might be surprised to learn that mortgage payments may actually be less than your rent. Call The Home Loan Arranger today at (303) 862-4742 to find out more!