Did you know you can buy your dream home while paying off student loan debt? It’s true and even quite common. While student loans are factored into your debt-to-income ratio, they shouldn’t prevent you from becoming a homeowner. And fortunately, there are many programs and options available to prospective buyers, some you may not be familiar with.
1. Co-buying With Friends or Family: Purchasing a home with a roommate, significant other or sibling allows you to combine multiple incomes to qualify for a better mortgage rate. This can help lower your monthly payment and make home maintenance more affordable.
2. Receiving Financial Gifts From Family: You can also accept gift money from your parents, grandparents or other family members to put toward your home purchase. Some loan programs have a cap on how much gift money can be used, so make sure you know the limits first.
3. Choosing Low (or No) Down Payment Loans : There are many low down payment options, including FHA, HomeReady and Home Possible loans. For loans with no down payment, VA loans may be available to veterans and military members as well as USDA loans for those purchasing in rural areas.
4. Using Assistance Programs: Down payment assistance programs can cover some or all of your down payment costs if you qualify. These programs vary by location, so talk with a lender to learn about potential options.
Working on your credit can also help you buy a home. Pay your credit card bills on time every month, aim to pay down your debts and never let an account go into collections. It also helps to get preapproved for a mortgage so you know how much you qualify for. If you’re ready to make homeownership a reality or would like a referral to a trusted lender, get in touch today.