Ah, the late spring. It’s an amazing time of year, where students all around the country will soon be tossing their caps up with great delight after 4 hard years of work. However, as the caps fall down, so does the realization of student debt, and the worries that come with it. Despite this, it is still possible to buy a home with a few easy steps. Join us today as we cover those!
Student debt can be considered one of the biggest issues in America today, as everyone from the kid down the block to politicians in Washington want to drive down the levels. Debt may be high for someone coming out of school, but that is no reason why they cannot fulfill their dream of one day owning a home, even with debt still left to pay. If you or someone you know is looking to buy a home with student debt still under their belt, these few credit tips will send them on their way:
Check and Improve Credit
If you already have student loans, then you already have a credit score. Find out what this is as soon as you can, and adjust from there. Ideally, your credit score should at least be above 620, as that will allow you to receive a conventional home loan, but the high the score is means the less interest you will have to pay on the loan. Should your score not be where you want it to be, you can raise it by lowering your debt-to-income ratio. This is what lenders will base your loan eligibility off of, and it analyzes how much of your income is being spent to pay off debt. Lowering your debt or increasing your income are the two ways you can fix this—which may seem difficult to do in the short run—but can easily be achieved in the long run.
Once you’re comfortable with your credit, the next step should be to go out and get a pre-approval from a lender. This step is vital in the home search, because it will let you know how much you can take out, and ultimately, what you will be able to realistically afford. Run through the paperwork, and wait for the results. The great thing about this is that even though you are approved, it doesn’t mean that you have to follow through with it—it is just a gauge to see what you can do.
Sure, it may be a no-brainer, but the best thing you can do for yourself in this situation is to think of all the facts, and try to sort out if this is the right move for you. Buying a home is a long and expensive process, and the expenses do not stop after the closing date. You need to take into account your current financial standing, and where you expect to be in the future. You’ll know in your gut if this is the right decision for you.
Once you’re ready, head down to our office to get started. It may be a long road, but we believe in the end, it is worth it.
Stop on in today—we would love to have a chat with you!