Education is and always has been a key to increasing your standard of living. However, in the last decade, tuition costs have tripled, which has made it hard for new graduates to attain homeownership. Here’s my outlined battle plan for overcoming this obstacle:
1. Accept that the good old days are over. It used to be that if lenders saw that your loan was in deferment, they would consider that during the underwriting process. Now, lenders are looking at your entire loan balance as a whole when considering you for a loan.
2. Start getting a student loan payment plan in order. Lenders would like to see that you’re making a reasonable payment relative to your income and loan amount.
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3. Pay down your overall debt. Student loans generally have a six to 12 month deferred payment period. Use this time to pay your debt! The goal here is getting your debt-to-income ratio below 43% at maximum, and preferably below 36%. Doing this will also help you in raising your overall credit score.
Accept that the good old days are over.
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4. Consider buying sooner rather than later. If you buy now, you’ll be able to start building your equity, stop making rental payments, and be less likely getting caught needing something bigger if and when your family size increases.
If you have any further questions about buying a home with student loans, please don’t hesitate to reach out to me. Just give me a call or send me an email and I’d be happy to help.
