Don’t Let Student Loans Hold You Back from Homeownership

Don’t Let Student Loans Hold You Back from Homeownership

Did you know? A recent study found that 72% of people with student debt believe it will delay their ability to purchase a home. If you’re one of them, you might be asking yourself:

Do you need to fully pay off your student loans before buying a home?
Or, is there a chance you could still qualify for a mortgage while carrying that debt?

These are common concerns, especially when considering such a major life decision. But it’s possible you don’t have to delay your goal of homeownership after all.

Can You Qualify for a Home Loan if You Have Student Loans?

At its core, your main concern is likely whether student debt prevents you from buying a home. According to Yahoo Finance:

" . . . student loans don’t have to get in your way when it comes to becoming a homeowner. With the right approach and an understanding of how debt impacts your home-buying options, buying a house when you have student loans is possible."

And statistics support this idea. A yearly report from the National Association of Realtors (NAR) reveals that 32% of first-time homebuyers had student loan debt (see graph below):

While every individual’s circumstances vary, achieving your homeownership goal might be more attainable than you think. Many buyers with student loans have successfully purchased homes. That should give you confidence—it’s possible, even for first-time buyers. For reference, the median student loan debt is $30,000. As noted in a Chase article:

“It’s important to note that student loans usually don’t affect your ability to qualify for a mortgage any differently than other types of debt you have on your credit report, such as credit card debt and auto loans.”

If your income is stable and your overall financial situation is in good shape, buying a home could still be within reach. In short, student debt doesn’t automatically mean you have to put your plans on hold.

Bottom Line
Student loans don’t necessarily prevent you from becoming a homeowner. Before ruling it out, connect with a lender to better understand your financial standing and how close you might be to buying your first home.