{"id":1871,"date":"2016-01-08T21:14:45","date_gmt":"2016-01-08T21:14:45","guid":{"rendered":"http:\/\/riverbankfinance.com\/blog\/?p=1871"},"modified":"2016-11-11T15:41:20","modified_gmt":"2016-11-11T15:41:20","slug":"qualifying-for-a-mortgage-with-student-debt","status":"publish","type":"post","link":"https:\/\/riverbankfinance.com\/blog\/qualifying-for-a-mortgage-with-student-debt\/","title":{"rendered":"Qualifying for a Mortgage with Student Loan Debt"},"content":{"rendered":"

\"qualifying<\/a>If you are in the market for buying a house it is important to understand the implications of qualifying for a mortgage with student loans. Each year, at least 60% of college attendees take out some form of student loans to help with the ever growing costs of higher education.\u00a0 While this can be an invaluable investment into one\u2019s future, these loans can pose a challenge when it comes to buying a home. \u00a0Recently,\u00a0new guideline changes have gone into effect that can substantially impact how someone qualifies for a mortgage.<\/p>\n

FHA home loans<\/a> are a great choice for first time home buyers with flexible work history and credit requirements!<\/p><\/blockquote>\n

The main way student loans impact an individual\u2019s qualification is through their impact on an applicant\u2019s Debt-to-Income Ratio (DTI).\u00a0 This ratio gives a lender an idea of an applicant\u2019s ability to reliably make monthly payments.\u00a0 Simply put, this figure is calculated by dividing all monthly debt obligations (ex. Car Loans, Credit Cards, Mortgages, Student Loans, etc.) by gross monthly income.<\/p>\n

Each mortgage\u00a0program has different guidelines that are key to qualifying for a home loan with open student loan debts. \u00a0Calculating the monthly costs for student loans is especially tricky if the loans are deferred, in forbearance or not yet in repayment.<\/p>\n

Regardless of program type, one of the most important actions a prospective home buyer much can take is to gather the payment documentation for the student loans.\u00a0 This will allow your mortgage professional to ensure the most accurate qualification and best deal possible. The buyer’s credit report may not always accurately reflect the buyer’s minimum student loan payments which may affect underwriting approval.<\/p>\n

Below are a few indicators of how student loan payments will affect a buyer’s debt to income ratio when qualifying for a home loan:<\/p>\n