HomebuyingFinancial IQ March 15 2019

Student Loan Debt? How You Can Still Get A Mortgage.

Saving for a down payment used to be a rite of passage after graduation, but with the student debt rising to unprecedented heights, it may seem out of reach for some – but it is not impossible! Here are what lenders are looking at and how your student loan debt affects your approval.

When a lender is looking at an applicant, they are likely going to review your monthly debt commitments, not your total amount of outstanding debt. To do this, the lender will look at both your front-end and back-end debt-to-income ratios (DTI) to determine if you can afford a monthly mortgage payment.

Your front-end ratio is going to be your projected monthly mortgage payment (including all taxes, insurance, and interest) versus your take-home monthly income. While your back-end ratio includes the mortgage payment along with all of your other monthly obligations, such as credit card, care, and student loan debt payments.

If you feel like your monthly debts are high, take a look and see if you are able to reduce anything through refinancing your current loans or paying off a credit card or two. This can help reduce your ratios and increase your chance of approval – even with your student loans.

Other factors to consider besides your student loans:


  1. How much is your down payment? The amount you put down will affect your front-end ratio. The more you are able to put down, the less likely your student loans will affect your chance of approval.
  2. What is your income? Income will be a key factor when getting a mortgage. Despite having student loans, having a degree suggests that you may be able to make steady payments due to a higher income.

    Note: While lenders will be looking at how much you make pre-taxes (known as your gross income), it’s important to look at your actual take-home pay (your net income) when budgeting for a mortgage. Your net income will directly affect your debt-to-income ratio.

  3. How high is your credit score? You probably already know that your credit score is going to be an important factor when it comes to home buying. Good news is that student loans are usually not included when calculating your score since it is seen as a safe, personal investment. Just make sure you’re continuing healthy spending habits to keep that score up.
  4. How long have you been at your current job? A lender wants to ensure that you have a steady and secure income. Two years within the same company is ideal.

While your student loan debt may look like the biggest obstacle getting in the way of homeownership, a lender may not see it as much of a threat. Before looking at your student loans, focus on your other debts and payments. Do you always pay your bills on time? Are you responsible with your credit cards? Do you have any other outstanding loans? These items are more likely to affect your chance of getting approved for a mortgage.

There is no one-size-fits-all when it comes to a mortgage.

Speak to a Loan Officer today to see if you can prequalify for a mortgage!

Get Pre-Qualified

Search Results for query

June 11 2019

Mortgage Rates at Historic Lows - Again!

Mortgage rates are constantly changing, but they have remained historically low for quite some time now. If you’re in the market for mortgage financing, it may make sense to go ahead and get pre-qualified now!

Read More

May 31 2019

What is Escrow?

When you’re buying a home, you’ll hear the word escrow multiple times throughout the process! The meaning varies slightly, but all of the variations have to do with funds being set aside for your home.

Read More

April 18 2019

Eagle Home Mortgage's Homebuyer Solutions Group

If you’re ready to buy a home, but are unable to qualify due to credit challenges, our Homebuyer Solutions Group (HBSG) team is here to help you get the education and advice you need to turn “not today” into “You’re a...

Read More

March 27 2019

Interest rates have dropped!

Get Your Home Equity Working for YOU and Refinance Today 

Read More

March 25 2019

5 Steps to Kickstart Your Mortgage Refinance

Ready to refinance your home, but don’t know where to start? Here are some necessary steps to get you started to possibly decrease your monthly payments!

Read More

March 15 2019

Student Loan Debt? How You Can Still Get A Mortgage.

While your student loan debt may look like the biggest obstacle getting in the way of homeownership, a lender may not see it as much of a threat. Here are what lenders are looking at and how your student loan debt affects your approval.

Read More

February 07 2019

A Modern Mortgage with a Personal Touch

In the digital age, we know that you expect a simple online experience that is quick, easy and guides you step-by-step through the mortgage process. With Eagle’s Digital Mortgage, you can apply for a home loan faster and easier than ever before –...

Read More

February 04 2019

How Secure Is Financing Your Home Online?

Technology has changed the way we live our lives – including home financing! Eagle’s Digital Mortgage has been found to save days (even weeks!) in the mortgage process by providing a more complete pre-qualification upfront and an easy way for you to...

Read More

January 23 2019

A Community That Fits Your Lifestyle

You’ve worked your sixty-hour weeks and raised your family, now is the time to live the lifestyle you deserve. Lennar's award-winning Active Adult communities create a relaxed and stress-free setting while also offering a variety of amenities and...

Read More

12345Last

Mortgage Calculators

Crunch the Numbers With Our Helpful Mortgage Calculators

Payment Calculator

payment calculator

Payment
Calculator

Affordability Calculator

affordability calculator

Affordability
Calculator

Refinance Calculator

refinance calculator

Refinance
Calculator

The Modern Digital Mortgage with a Personal Touch

Paperless. Effortless. Awesomeness TM

Simplify the home financing process with our Digital Mortgage. We'll be here to help navigate you through the entire process.

Get Pre-qualifiedWhat is a Digital Mortgage?