Are student loans "good" debt?

mattsbride2006 · February 2009

I am done paying for my college and we have all our credit cards paid off. The only thing now (besides car payment) is my husband just finished flight school and has a HUGE amount of student loans to start repaying. Flight schools costs about 70k. Will that negatively effect the home loan we get? I thought we were doing pretty good finacially but I'm not sure if the broker will see it that way.

Kore! · February 2009

No debt is "good" debt, per se. It will affect your debt-to-income ratio (you'll have to count the payment in your DTI), but beyond that, your broker won't really have a judgment about it unless you make your payments late.

bride_aimee · February 2009

Even though my husband's student loan was defered for another 8 months it still showed up on his credit and made our debt ratio extremely high which made us not be able to get approved for much at all.. Thankfully my father in law decided to pay it off and help us out..

I've been told by some people that they didn't have any problems with their student loans and getting approved. I guess it just may depend on your lender.. I would just go sit down with the bank or mortgage company and see what they can tell you!

Renee Wooster · February 2009

H and I had no problems buying our house with my student loans; just make sure you never default on them because that will screw up your credit for a LONG time!!

Pamela05 · February 2009

They will be considered because it is a commitment that you have to pay off. They are weighted different in your credit score which will affect your rate, but as far as the payment you can afford, they count as much as anything else.

SayAnything84 · February 2009

We have a lot of student loan debt between the two of us. When we got pre-approved they just counted it in our debt to income ratio.

Jigs1114 · February 2009

My Husband is a pilot too so I know where you are coming from! It sucks! But what is important to look at is not the total debt amount but the minimum monthly payment (which is generally why SL are better because payments are lower) That is all the the mortgage people look at, front end and back end ratios...we are going FHA, so basically our back end ratio has to be below 49% of the monthly income...we are well below that thanks to hubby's 1% interest student loans...

rhetta09 · February 2009

I have heard student loans and home loans described as "good" debt because they are both an investment in your future. Car loans and credit card debt are "bad" debt. While this is true, keep in mind that all debt is DEBT, and affects your ability to be approved for a loan. As long as you are honest about your situation, your mortgage agent will likely help you come up with a game plan that is best for you.

007girl · February 2009

From one former student to another, student loan debt is not bad debt!! I took out a little more in student loans than your hubby and my husband and I got a loan no problem!! We both have great credit, which was also a factor. As long as you pay your bills and have great credit (especially in this economy), you should be fine!!!