How to Buy a House with Student Loan Debt

How to Buy a House with Student Loan Debt in Charlotte

Many Millennials are facing a major obstacle in purchasing their first Ardrey home for sale. Student loan debt is a huge hindrance to those who have substantial monthly payments. Such payments can cause a significant decrease in mortgage affordability. For some, it seems impossible. Read this article for tips on how to buy a house with student loan debt and move toward being financially fit.

Improve Your Credit Score

Credit worthiness is a primary factor when lenders decide whether or not to lend to you. The good news is you can have a stellar credit score even with a lot of student loan debt. As long as you make on time payments every month, you are in good shape.

To boost your credit score even more before applying for a mortgage, pay all of your bills on time and don’t close old accounts. For example, if you have a credit account that is in good standing, closing it may actually lower your score.

Decrease Your Debt-to-Income Ratio

Your debt-to-income ratio can really hit you hard if you have significant student loan debt. Many lenders use the 28/36 qualifying ratio to determine if you are eligible for the best rates for a home for sale in Ardrey.

This means that you should not be spending more than 28 percent of your monthly income on housing expenses and no more than 36 percent on debt payments. You can reduce your debt-to-income ratio by paying down some of your debt or by finding additional income streams.

Down Payment Assistance Programs

Consider down payment assistance programs if you are struggling to come up with money down due to monthly student loan payments. For example, FHA loans require a down payment as low as 3.5 percent. If you choose a more rural location, you may also qualify for a USDA loan, which boasts no down payment!

Are you dreaming of a house for sale in Ardrey, but need more help on how to buy a house with student loan debt? Homes By Cross would love to help you make this dream a reality!