So you want to buy a home… but you’ve still got those pesky student loans (or other debt) hanging over your head… is it still possible to make your dreams of homeownership a reality? The short answer is, yes! It can be a bit more difficult, and may require some additional work on your part, but it’s definitely possible.
Here’s what you need to know about buying a home with student loans.
Your Credit Score Matters—A Lot
Any time you buy a home (or apply for any type of loan), your credit score matters. But it’s especially important to have excellent credit when you’ve already got some substantial debts. Having a good credit score shows that you’re capable of managing your debts and making payments on time.
Your Debt-to-Income Ratio is Another Important Factor
Here’s where having a good, high-paying job comes into play. If you’ve got a lot a debt, but also a lot of income, you’re much more likely to be able to qualify for a loan. Most lenders will compare your amount of debt to your amount of income to determine if it’s feasible for you to take on more debt.
Down Payment Assistance is Available
A large obstacle in buying a home when you’ve got student loans is coming up with that down payment. After all, if you had all that money, you probably wouldn’t be in debt, right? But there are actually quite a few organizations that offer down payment assistance programs—like the FHA, the USDA, and the VA.
Refinancing Your Loans May Make Them More Manageable
If your monthly loan payments are overly large, even if you’re capable of mkaing them, it may give some lenders reason to pause. Refinancing your student loans could help you get a lower interest rate and bring those monthly payments—as well as the overall amount you owe—down to a more manageable level.
Preapproval is Your Friend
Before you start shopping, contact lenders to get preapproved. This way, you’ll be able to sit down with a lender and discuss your loan options, or what you can do to improve your ability to qualify. It’ll also give you a good idea of what your monthly payments will look like, how much home you’ll be able to afford—and whether buying a home really is a sound financial idea.
Are You Thinking of Buying a Home in Bayonne?
If you’re considering buying a home in Bayonne, NJ, then it’s time to contact Century 21 Viewpoint Realty. I’m here to help you explore the area, discover its beautiful neighborhoods, and find the perfect place for your home.