Student Loans & Homeownership

Benigrl28 · July 2012

Hello all. I'm new to this site so I hope I'm posting in the correct forum but I'm getting married soon and we have already started looking for homes. We live in Wisconsin. I'm in college getting a second degree and my fiance has paid his loans off already. We both have good credit but I'm concerned about how my school loans will affect our ability to get a mortgage loan. We have no outstanding debit and are looking to get pre approved soon. Can anyone shed any light or advice for me please? Thanks in advance.

TheMrs923 · July 2012

I really don't think it should have any bearing on your ability to be approved for a loan so long as it doesn't make your debt to income ratio top-heavy. I'm new to this as well so, I'm sure someone will correct me if I'm wrong.

HarleyKins · July 2012

The debt to income ratio is what banks look at to see if you can afford to live after buying your house. Lenders used to let you spend your last dime and way over-extend buyers and that's the mess we are working on cleaning up. Do you have money for a down payment, closing costs, inspection(s) and money in reserves? Banks will also want to see this as well.

Congrats on not having any other debts!

Good luck and if you are in the Madison area, look us up www.keithandkinsey.com

We'd be happy to help as we work with many first time home buyers.

LarissaB · July 2012

It does all come down to your debt to income ratio and your credit score. Both my husband and I have student loan debt and we had no problems securing a loan. But we both work full time jobs, the only issue I could possible see is if you are in school with little to no income, the income of your husband needs to be great enough so that your debt:income ratio isn't super high. If you are in school full time and not working much, you may want to check into just having the house/mortgage in his name since either way it's going to mostly be his income counting towards what they bank will approve you of and then your student loans won't even matter.

But I wouldn't worry much, student loan debt is sadly a common thing so I don't think banks look down on it as much as credit card debt

MommyLiberty5013 · July 2012

Your SLs will be counted in your debt even if you have deferred payments. That is one thing people are often surprised about that I have seen.

toothpastechica · July 2012

I have student loans and was in school full time when we bought the house, and for that reason we put the house in only H's name. I can be added to the deed at any time, but to get a morgage it looked better if it was not dependent on

A) me getting a job to be able to afford it/based on a 2 income household

or

my student debt, since H had no debt.

My credit rating is actually really good, but the morgage broker advised us that since I don't currently have full time income, its smart for both us and the lender to make sure got a morgage that H could carry by himself, and then when my loans are paid off I can be added to the deed. (of course soon after we joint our bank accounts, so now we share debt anyways...)

raw1299 · July 2012

I have 25k in student loans, graduated last year and just secured my job back in January. I make decent money (32k/yr) and my credit is OK-Good (650). When we went to see how much of a loan we could get, they basically told me it wasn't even worth looking at me, and that if we did take into account my income, the rate would be higher due to my credit score. My husband makes a considerable amount more than I do, had his job for 8+ years, and has excellent credit (810). In the end we decided we're just going to put the mortgage in his name.

AurorasEnvy · July 2012

Unless you went to a ridiculously priced school and make peanuts in your career, you should be fine.

FWIW, my H and I bought a house (also in Wisconsin) last year. Combined we have about $500k in student loan debt (yep, dental school is THAT expensive). We were still able to get a mortgage just fine, all they asked for were transcripts to prove that we graduated from school (apparently a state license to practice wasn't good enough for them).

erbear84 · July 2012

I have about $60K in student loans and FI has a good amount, too. However, FI has a good job and I am stuck substitute teaching, so my name won't be on the mortgage. Talk to a loan officer about it.

LoveKiss · July 2012

Since you are an active student, i assume that you are not bringing in much income right now? It's probably best to apply for the mortgage in your fiance's name, as he is the main breadwinner for the time being. When you do that, your income and debt won't even be considered because everything will be based on his income, debt, and scores.