When you have student loan debt, it can feel like you will never be able to get out of it. However, this is more common than you think. According to the personal finance site Make Lemonade, student loan debt has ballooned to $1.5 trillion, and 46 million people are struggling to pay it back. According to a recent study, nearly 2.2 million student loan borrowers have a balance of at least $100,000.
With these statistics in mind, you may think that homeownership is nothing but a pipe dream. But this does not have to be the case. There are a few things you can do to buy a house, even with these debts, and in this blog post, we will go over a few of them. So you can finally put your homebuying dreams into action. Keep reading!
4 Tips For Buying A House When Paying A Student Loan Debt
Check Your Credit Score
Your FICO Credit Score is a number that’s commonly used to determine your borrowing power. The higher, the better. With an excellent or good score, you’ll have less risk attached and can get rates as low as 3% for qualified mortgages, which means more money in your pocket each month.
Keep Your Debt-To-Income Ratio Under Control
You can decrease your D/TIM by ensuring that all debts are paid off and there’s enough cash each month. If both things aren’t possible right now, it might be time for a side hustle.
Maintain A Low Credit Utilization Rate
Credit utilization is the percentage of your credit limit that you are using. If it’s higher than 30%, consider ways to manage or reduce this number, such as asking for a raise in line with increases to other cards, paying off small balances every week rather than carrying them forward from month-to-date.
Keep Track Of Your Payments
To ensure that your credit score remains high, it’s important to establish an early payment history with on-time payments. Your lender wants financially responsible borrowers and will judge you based on how well you have paid in the past. This means they care more about what’s happening now than previous years’ data may show.
Let A Professional Assist You With Future Investments.
The most effective way to think about buying a new home is to partner with a professional. We’ll always put your best interests first with Karen Spencer Real Estate. I have 40 years of experience in the real estate industry and have helped budget-conscious homeowners find their perfect match. I pride myself on being an open book with my clients from start to finish.
So if you’re looking to buy a house but feel like your student loan debt is holding you back, don’t worry. Karen Spencer Real Estate is here to help you make your homeownership dreams come true.