Dealing with student loan debt?
Buying a house starts with having a plan. In the not-too-distant past, the process of moving from college student to homeowner was fairly straightforward. You went to school, earned your degree, started your career, and began building for your financial future until you were ready to purchase a home. Today, things are different… to say the least. Student loan debt is a reality for most college students, and too much debt can make it feel like buying a home is out of reach. The good news is that you can still buy a house while paying off student loan debt, and we’ve put together a guide to help you accomplish your home ownership goals.
Clean Up Your Credit And Pay Down Other Debts
Lenders want to see a strong credit history when offering a loan, and you can do plenty to spruce up your credit without paying off big chunks of your student loan debt. Start by paying down any other debts you may have, especially from high-interest credit cards. Make sure that you’re making all of your necessary payments on time, and consider refinancing options if your credit payments are out of line with your current income.
Understand How Much Home You Can Afford
Every home buyer has to make compromises between their idea of a perfect home and the properties available that best fit their budget. It’s no different when you’re shopping with student loan debt! Consider your ability to make a down payment, your ability to pay your mortgage, and the other debts that you need to cover. Speaking with an experienced lender can help you get a better grasp on what you’ll have to spend.
Start Saving For A Down Payment
Your ability to make a down payment plays an important role in securing a loan, so it’s a good idea to start saving as soon as possible. Saving for a down payment can feel like a daunting task while you’re also paying down student loan debt, but you don’t have to do it all at once. Save what you can, when you can, and look for creative opportunities to add to your down payment fund.
Lower Your Debt-To-Income Ratio And Pay Bills On Time
Your debt-to-income ratio, or the amount of debt you pay each month compared to your monthly income, is a big factor in securing a mortgage. Lower your debt-to-income ratio by earning extra money, paying down debts, and considering refinancing your student loan debt if the right opportunity arises. It’s also important to make sure that you always pay existing debts on time, including your student loan payments. Lenders want to see that you have the funds to cover your payments and that you take the necessary steps to make those payments on time.
Don’t Be Afraid To Seek Help
You’re far from alone when shopping for your first home, and there are plenty of happy homeowners who have been in your shoes before. Don’t be afraid to ask for advice from trusted sources or to look for help from government agencies that may be able to provide assistance. FHA loans are a popular tool for many first-time home buyers.
Paying off student loan debt and buying a house at the same time can be a challenge, but it’s one that many first-time home buyers are able to overcome. By paying down debts, saving when you can, shopping within your means, seeking help from qualified sources, and working closely with your lender, you can set the stage for buying a first home that you’ll love to call your own.
– John R. Wood Properties, Website www.johnrwood.com
Title Junction is a full service real estate title company serving the area of Fort Myers, Cape Coral and the entire state of Florida since 2005. The company handles a number of real estate title services for both commercial and residential properties.
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In case you missed it, check out our last Title Junction post: How Am I Affected by Bank Failures when Closing on a Home?