Did you know that 54% of recent college grads graduate with student loan debt. That means over 50% are having a harder time buying a home and reaching some financial goals. “I’d say student loan debt is probably the biggest concern people have about getting qualified,” says Dan O’Brien, a Realtor® in Indianapolis, IN. “I’ve had many buyers tell me they want to buy a house but they have a ton of student debt and don’t think they make enough to qualify because of it.”
Should you wait to buy a home until you are debt free? Not necessarily. Today I am going to give you some FREE education about some of your options and tips to help your dream of owning a home become a reality even with student debt.
- Figure out your payment plan prior to applying for a home loan – Just because your loans are in deferment doesn’t mean it won’t affect your ability to qualify for a home loan. Pick a payment plan and get that in order. You might even want to consolidate the loans. Figure out a budget that you feel comfortable paying making sure to include the student loan payments in your budget. If need be while you work your way up the corporate ladder set up your payments based on income to help ease the burden.
- Pay down your credit cards – We have all been there, being a full time student can be taxing on the bills. Racking up some credit card debt is not uncommon but now that you have a job and no mortgage now is a great time to pay down those credit cards to under 30% of the usage limit.
- Find a co-borrower or save for a decent down payment – One of the biggest hurdles to over come when buying a home even if you are not a recent grad is coming up with a down payment. Yes there are “zero down loans” but they are not great and don’t always help save you money in the long run. Save, save, save! You will need a minimum of 3.5% of the sales price. Lets do the math on a sales price of a $200,00 you will need to save $7,000 for your down payment. Lets take it a step further and say you are making $45,000 a year and you are still living with mom and dad and only have a few bills, it shouldn’t take you more than 3-4 months to save up for a down payment.
This isn’t to say buying a home as a recent grad is for everyone, I myself rented for a few years until we got our ducks in a row. But for others I hope these few tips can point you in a direction towards home ownership. Please contact anyone at Beam Lending for more information or to receive a FREE loan quote.
Photo Credit: 123rf