When it comes to buying a home today, this next generation of home buyers faces a lot of obstacles, such as high costs of living and high personal debt. Some worry about the impact student loans have on your ability to get a mortgage for your home, a goal thought to be out of reach for many millennials. But for the first time in many Americans’ lives, the task is not impossible!

Don’t get me wrong, getting a mortgage and clearing your student loan debt is challenging, but not impossible.

You may be grappling with the question of whether you should pay off your student loan debt before you even buy a home. It is important that when you are buying your home and have student loans, you consult with a mortgage specialist to see which plan would be best for you without compromising your finances. If you are buying a home and have student loans, read up to learn more about how your student loans affect your chances of getting a mortgage in 2020. Our Loan Officers have had 25 years working in the Santa Clarita Valley and will give you the best financial advice before you even look for a home.

Credit Score Advice

The time you spend paying off your student debt before trying to buy a home could help your credit rating by improving your payment history. If you are buying a home and have student loans, we recommend that you prepare for it and start saving as soon as possible, even if you do not have student loans.

Leveraging Student Debt

Whether a student loan borrower applies for an FHA mortgage or a conventional one, understanding how much student loan payments are when they are deferred is a good idea. So don’t forget to plan your future spending now to give yourself the chance to afford it when you’re ready to buy, even if you have student debt. Remember, if I have not paid off my student debt before I buy a house, or if the cost of owning a home is higher than expected, I may decide to stop paying. In the end, you may decide it’s worth waiting and paying off your student loans first.

There are even special types of loans for people like doctors, who have much more school debt than most. The good news is that taking out student loans does not in itself prevent someone from getting a mortgage and buying a home. Mortgage experts will tell you that if there is enough money to make your loan payments consistently and the amount of payments matches your income, then you don’t have to have student loan debt as an obstacle to buying your home.

Have a steady job? Do you have your daily expenses under control with only a few minor expenditures in the last year or so? Now maybe the best time to own a home! We’ve seen record-breaking numbers of homeowners coming into Santa Clarita and we can’t wait to help you move into the home of your dreams. Our quick 5-minute application will tell our Loan Officer everything he needs to give you the most accurate mortgage quote.