Unpaid student loan can make it difficult when trying to buy a home.

Unpaid student loan can make it difficult when trying to buy a home.


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There are 4.9 million more students enrolled in degree-granting institutions this year than there were in the year 2000. This directly correlates to the national student loan debt, which has now hit $1.2 Trillion. As students exit their undergraduate careers and enter the real world, they take with them both their degrees and their student loan debt. 1 and 10 of those students have over $40,000 in student loan debt and on top of all that is the stress of finding a job. So how does this relate to real estate? Well, an unpaid student loan can make it difficult when trying to buy a home.

If you are still paying off student loans but want to buy a home follow these helpful tips:

  1. Improve Credit Score
    • Pay your bills on time
    • Keep your credit card balances equal to/below 30% of your maximum available credit
    • Avoid closing credit accounts that you don’t use and don’t open new accounts in the months leading up to buying a house.
    • Maintain consistency when it comes to paying off your credit card accounts. Don’t pay the balance to zero unless you can do this every month.
    • Some debt is good debt. Lenders need a pat history credit to approve you for a loan. Therefore showing that you are a responsible borrowing can prove to be an advantage.
    • Keep track of your credit score
  2. Decrease Debt-to-Income Ratio
    • DTI ratio is a difficult to decrease. Your debt is not going away so the only way to decrease DTI ratio is to increase your income. The advice I can give is putting in extra hours at the office, proposing a raise at work, and/or taking a side job (freelance work).
    • Another option is to enter into a student loan payment program, which decreases your monthly payment. Yes, each month you will be paying less but his extends your payment plan and increases your accrued interest.
  3. Get Pre-Approved For A Loan
    • Another Getting pre-approved gives you the opportunity to see what kind of loan, interest rates, etc. you qualify for. The downside to this is that your short-term financial history will be closely examined. You will have to provide your last 2 years of W-2’s, federal tax returns, 2 months of asset statements, and explain any large deposits (if any) that are not within normal payroll.

This all may seem like a daunting task but plan ahead, start working towards some of these things years before you are thinking about buying a house, and look to others for guidance!  

Give us a call today at 720.260.4461 or 587.800.1213 to let us know what YOU need help with! D Gees Homes & Realty has the experience, know-how, and infrastructure to offer you great opportunities in your real estate endeavors, whether you need to sell your house, a new rehab project to work on or would like to learn about other options.

Please call us today at 720.260.4461 or 587.800.1213 if you’d like to learn more about the real estate services that we offer.

 

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