When buying a home, your mortgage lender will go over your finances carefully. Every financial decision you make is under scrutiny. This includes those in the past that still impact your credit today, such as student loans.
Most people will have student loan debt, and regardless of whether you have a payment plan or you have had issues, the situation with your debt will impact your ability to buy a home. U.S. News and World Report explains student loan debt has a similar impact as any other type of debt.
Monthly payment
If you have a lot of student loan debt, then you may worry it will have a bigger impact on your ability to get a mortgage. However, the real concern is not the total you owe but rather how much you pay each month. When assessing your ability to pay a mortgage, the lender looks at monthly obligations.
Delinquency
Falling behind on your student loans will also have an impact on your ability to get a mortgage. Just as with any other debt, you must stay current on your payments to avoid having late marks on your credit report that will negatively impact your ability to get a loan.
Options
If you have very high student loan monthly payments, you should look into repayment plan options. There are several choices you can use to help you lower your monthly obligation and make repayment easier. You may be able to look into forgiveness as well, depending on your situation. You will want to make any changes prior to trying to secure a mortgage so you have them in place when you approach the lender.
