Is it Possible to Get a Mortgage with Student Loan Debt?

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Do you feel like you can’t buy a home because of your student loan debt? You’re not alone! In fact, 44% of student loan borrowers reported that student loans delayed their mortgage and homebuying efforts, as reported in the Consumer Finance Bureau’s 2023-2024 Student Loan Borrower Survey.

However, you don’t need to wait until your student loans are fully paid off before you apply for a mortgage.

Your Qualification Isn’t Just About Your Debt

Homeownership is possible for qualifying borrowers—even if you have student loan debt!

Lenders want to ensure you don’t have more debt than your finances can manage. They use a debt-to-income ratio (DTI) to determine your finances can additionally handle monthly mortgage payments. Your DTI can be calculated by measuring how much of your income goes toward your debt, such as car payments, credit cards, and student loans.

Ideally, a lower DTI is better. A higher percentage can indicate most of your income is going toward your current debt. This can signal to a lender that you may not be able to make timely payments.

Should You Pay Down All Debt Before Getting a Mortgage?

You don’t necessarily have to pay off all your loans to obtain a mortgage. In fact, some debt can be healthy and help you achieve your financial goals, like your car payments or even your student loans. The Federal Reserve Bank of New York notes that student loans are the second largest type of consumer debt in the U.S., preceded only by mortgages. Consistently paying your loans is an efficient way to show lenders that you can take on another loan, like a mortgage.

In addition to your DTI, there are other factors that go into mortgage approval, such as your credit history and credit report.

Homeownership Within Your Reach

You don’t need to be totally debt free to qualify for a mortgage! Contacting us is the best way to know how much home you can afford and what your payments could look like. Our Loan Originators will work directly with you to obtain pre-qualification or pre-approval!