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    Buying a Home with Student Debt

    A Guide to Buying a House when you have Student Loan Debt

    Student loan debt can be a pretty big pain point, and a lot of us would prefer that we didn’t have it. While it would be nice to graduate debt-free, this isn’t a luxury that the majority of Americans have at this point in time. Already, young homeowners are feeling the impact of student loans on their lives—but it might impact more than you think. In this article, we will explore what it is like to buy a home with student loan debt.

    Having Student Loans Doesn’t Mean You Can’t Buy a Home

    There is a common belief being shared that states if you have student loans, you can’t buy a home. The good news is that this is completely untrue. There is no unspoken policy that guarantees that those with student loan debt won’t be able to buy a home. You can purchase a home with debt, so don’t hold yourself back if you have been wanting a home.

    The root of this myth is based on the amount of debt that comes with it. Debt can play a large role in whether or not you can purchase a home. While this is true, student loan debt can be a bit different than traditional debt. Don’t be one of the countless millennials that continue to rent because you think that no one will sell you a house. It just isn’t true.

    Student Debt is Preventing Millennials from Buying a Home

    Even though there is not a rule that says a person with student loans can’t purchase a home, it might inhibit you regardless. High amounts of student loan debt can be particularly worrisome for lenders, particularly if you have a bad interest rate and will likely be paying on them for a large portion of your life. 

    While student loan debt is very different from maxing out a credit card, the fact remains that it is still debt. If you have a lot of it, lenders might not feel confident about lending to you—and that isn’t all. Student loan debt can make it more difficult to save up money for a home, and it also has the ability to make it harder to for you to pay down any other debts. Overall, it is difficult to deal with.

    How to Buy a House When You Have Student Loan Debt

    If you want to buy a home while carrying student loan debt, you need to excel in every other area. This means that you should be actively reducing and eliminating all other forms of debt to ensure that your student loan debt is the only debt that you are bringing to the table.

    In addition to paying off your other forms of debt, you should also take steps to improve your credit score. Make sure that you never miss a payment and continue to pay down your loan as quickly as possible. The better your credit history is, the more likely you are to receive a loan from a lender so you can purchase your home.

    As you continue to pay down debt and boost your credit score, it can really help to put as much money in savings as possible. The more money that you can put down, the more appealing you will be to lenders even if you have a large amount of student debt. It really can make all the difference when it comes to what kind of home you can invest in.

    What You Should Know Before Buying a House if You Have Student Loan Debt

    To buy a home while you have active student loan debt, you should always consider how you will look to lenders. Focus on keeping your credit utilization low and show the lenders that you are responsible and on top of your bills. However, you need to be aware that you might not qualify for that dream home if your income is too low or your student debt is too high. Don’t get discouraged by this. You might need to adjust your approach or let more time pass.

    A great way to secure a loan despite student loans is to seek out loans that offer down payment assistance. VA loans, USDA loans, and FHA loans are all great for getting into a home if you don’t have a lot of extra money to build a solid savings account. Using these loans can help you to comfortably afford a home and move in sooner rather than later.

    How to Successfully Purchase a Home with Student Loan Debt

    You might be wondering how you are supposed to purchase a home with all of these odds against you. You are not alone in this. In fact, millions of graduates face this all around the United States. To be successful, you need the right approach—and it can really pay to have the right person in your court.

    If you want the highest chance of success when it comes to paying off your loans, you need someone who knows how to navigate these situations. A valued real estate agent can make a huge difference regarding what kind of home you will end up in. By leaning on these trained professionals, you can find the best path for success.

    Your real estate agent will know how to help you navigate these hurdles and will be better at estimating what home will be the right fit for you. They can offer advice, pair you up with valued lenders, and make navigating the process much easier.

    Final Thoughts

    Millions of people have student loans, and a lot of us have loans that are fairly high. While this can be a hindrance when purchasing a home, don’t let the rumors fool you. You can own a home with student loan debt—and a nice one too! As long as you work with a trusted real estate team, you will be able to navigate your path to homeownership with ease. Your new home is waiting for you, so it is time to get started.

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