Student loans are making headlines again. Whether you've been keeping up with the news or only catching a few updates here and there, there's a good chance they've been on your mind lately.
If you’re wondering whether you need to put your home-buying plans on hold, here’s what to keep in mind:
Having student loans doesn't mean you have to put your homeownership plans on hold.
The Biggest Myth About Student Loans and Buying a Home
One of the biggest myths first-time buyers believe is that they need to pay off their student loans before they can qualify for a mortgage. The good news is that's usually not the case.
As a recent article from Redfin explains, student loans are usually treated just like other monthly debts, such as credit cards or car payments.
““Yes, you can get a mortgage with student loan debt. Lenders primarily assess your debt-to-income (DTI) ratio, which compares your monthly debt payments, including student loans, to your gross monthly income. Having student debt doesn’t automatically disqualify you if your DTI is within acceptable limits.”
”
So just because you have a student loan on your credit report doesn't mean you're automatically disqualified from buying a home.
Instead, lenders look at your overall financial picture, including your income, credit history, and other factors. Student loans are just one part of the equation, not the whole story.
You're in Better Company Than You Think
To put that into perspective, here's a reassuring stat from the National Association of Realtors. Their research found that 33% of first-time homebuyers had student loan debt, proving you can still buy a home even if you're paying off student loans.
One in three first-time buyers carries student loan debt, with the typical balance around $30,400.
Let that be a reminder that people buy homes with student loan debt every day. Having student loans doesn't automatically mean homeownership is out of reach.
Don’t Count Yourself Out Before You Even Try
At the end of the day, this is where many buyers get stuck. They assume they won't qualify and never find out what's actually possible. The truth is, every financial situation is different, so don't count yourself out before exploring your options.
If you have a steady income and your finances are in good shape, buying a home may be more within reach than you think. The best way to find out is to talk with a lending professional and see what you qualify for.
You might be closer to buying a home than you think.
Bottom Line
Student loans don't have to keep you from buying a home. If you've delayed your plans because of that debt, reach out to a lender to explore your options. It might not be as big an obstacle as you think.
