Buying a House with Student Loan Debt

Home Inspector with Doctor Sniffs Bed Bug Dogs

If you attended veterinary school as I did then most likely you have A LOT of student loan debt. You can read interviews with dozens of veterinary students here, and they all have massive student loan debt. There are not many scholarships for veterinary school, so most veterinarians graduate with $200,000 or more in student loan debt. They know this going into veterinary school, so this is not a deterrent just a fact. This veterinary school student loan debt is usually piled onto undergrad student loan debt. 


If you live in a state that offers free undergrad college to in-state residents then definitely take advantage of that! New York State is just one of about 20 other states offering free tuition for in-state residents. 


This debt does not have to stop anyone from buying a home. Student loan debt does not weigh on your credit score like credit card debt. As long as you are in good standing with your student loan provider and paying at least the minimum payment, you can buy a house without a problem. Student loans can also be paid off in income contingent plans. This means that your mortgage payment will be taken into consideration and your student loan payment will decrease as your monthly expenses increases. 


The tricky part might be trying to save the money for a down payment when your whole paycheck is going towards the student loan payment. This is possible, even if you did go to veterinary school or some other professional program. It will take a lot of dedication and saving money, but it is possible!


If you have any spare time you can start up a side hustle. This side project should be something that you enjoy. Sometimes the side jobs can turn into a full-time business. I started a side business where I took care of other people’s dogs in my home. I love animals so this was a win-win situation. This helped jump start my savings and got me on the road to being the homeowner that I am now.


The mortgage company will look at your debt to income ratio and decide if they think you can handle the mortgage, bills, and student loan payment. Another way to buy a house is by using an FHA loan (Federal Housing Administration). This loan is popular for first time home buyers because you are able to put down as little as 3.5% instead of the traditional 20%. You do have to pay a mortgage insurance every month on the loan.  This mortgage insurance allows you to put down less than 20% and in turn, it protects the bank that loans you the money.


If you are a recent graduate with a lot of student loan debt then the FHA mortgage might just be the way to get yourself into a home. If you don’t want to pay the extra mortgage insurance each month then prepare to save 20% for a down payment before you start looking for your first home.

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