Student Debt Holding You Back from Homebuying?

For many, getting their college education was a great experience. Not only were they able to continue their education, but obtaining a degree has allowed them to pursue careers that may have otherwise been inaccessible. While all of this sounds positive, many college graduates have a great deal of student debt. Student debt not only makes daily living a struggle, but it also hinders those who want to start building their lives from taking the next steps.

In a 2017 Aspiring Home Buyers survey, 59% of non-homeowners are not comfortable with taking on a mortgage with their student debt. Many college graduates are plagued with playing off student loans for several years after they’ve graduated. It is estimated that college graduates today have an average of $37,172 in student debt, thus, making the idea of owning a home a pipe dream for many, or at least until the debt is payed off.

However, we’re here to tell you buying a home in Albuquerque while still paying off student debt doesn’t have to be a dream for the future! Many lenders have loan programs with as little as three to five percent down payments, but now, lenders have announced changes to how student loan debt is treated, which can make a world of difference in qualifying for a mortgage!

For the 5 million borrowers who participate in the reduced payment plan, actual payments are considered for calculating debt-to-income ratio rather than maximum payment amount. Basically, what all this means for you, is that lenders will look at your annual income and the percentage of debt-to-ratio income without all the other factors, thus making your payments more affordable. However, non-mortgage debts are paid by another party of at least 12 months, will not be calculated into the debt-to-income ratio. For instance, if your parents are contributing to loan payments, they would not be counted against the DTI ratio for the student.

With all these changes, students still paying debt now have a great opportunity to make homebuying a reality instead of waiting years before they are able to purchase a home. Best practice is to consult a trusted mortgage professional to find out if these new changes apply to you, and get pre-approved for a home loan.

If you are ready to take the next steps towards become a homeowner, give Team Sedoryk Properties a call today: (505) 892-1000. We’ll help you find the perfect home and lend you a helping hand to find a trusted mortgage professional that fits your needs.