Are you worried that your student loan debt will prevent you from getting a mortgage to buy a house? You’re not alone. According to a survey by the National Association of Realtors, half of non-homeowners say that student loan debt is delaying them from buying a home, and this number jumps to 60% for millennials. The average public university student borrows $30,000 in student loans to get a bachelor’s degree, and the average monthly student loan payment is $460. 

Even those who are in their 40s and 50s are still paying off student loans. This is not just a first-time homebuyer problem. 

To get a mortgage while having student debt, your debt-to-income ratio is one of the most important factors. It measures the percentage of your monthly income that goes towards paying your debts, including student loan payments. Your debt-to-income ratio should be no more than 45% of your gross monthly income. Many lenders consider the ideal debt-to-income ratio, including a mortgage payment, to be 36% or less. 

There are three ways to improve your debt-to-income ratio: make more money, spend less money, and pay down your debt. While it may not be easy to find a job that pays more, living within your means is the surest way to improve your debt-to-income ratio.

If you would like more information about how to buy a house while dealing with student debt, feel free to contact me. 

Until next time, Jeannie