Student Loans and Buying A Home
"In this world, nothing can be said to be certain, except death and taxes.”
Benjamin Franklin was onto something when he said this a few hundred years ago. While taxes are still an inescapable part of financial life, version 2.0 of this for millions of Americans who have endured the higher education system rears its head as student loans. Forbes Magazine calls student loan debt in the United States the "$1.5 Trillion Dollar Crisis."
Does this daunting number hold ominous news for potential homebuyers with student loan debt? The answer: not entirely. The higher the debt-to-income ratio, the more a mortgage company will look a borrower's ability to repay the loan, or may also offer a higher interest rate.
Those who have student loans should work diligently to pay them down before applying for a home loan, as a higher credit score and less debt will be helpful in the application process for a home loan.
Read more tips from Windermere's mortgage partner Penrith Home Loans on student loans and home-buying.