Should you buy a home while still paying for student loan?
If you’re currently working or was out of college for a long while, you might be thinking about buying your own home.
However, the dilemma of still having a student loan to pay might hold you back.
Are you going to finish paying the existing debt first? Is it okay to buy a home even if you still have a debt?
Becoming a homeowner is a big financial commitment to make. There are many factors that you should consider before making this decision.
But, once you get decided that you are ready to be a homeowner, here are the things that you can do to help you buy a home while paying your student loan:
Check Your Credit Score
Make sure to talk to your lender about your credit score. Ask for an updated report.
This step is important because you should aim to fix or improve your credit score. Higher credit scores can give you best deals and rates.
So make sure that paying on or before the due will be on the top of your priority. Should you see some questionable transactions, make sure to fix it with your creditors at ones.
Increase Your Income
The most difficult but the simplest way to get your home loan approved is to decrease your Debt-to-Income (DTI) ratio. The simplest way to fix this is to increase your income.
To determine your ability to pay monthly payments, the lender will calculate your DTI. As of 2014, 43% is the acceptable ratio.
Doing freelance job or looking for a higher income job can help you increase your monthly income; this will give you more chances of an approved loan.
Get Pre-Approved: Ask Experts on How to Afford and Buy a Home
Buying a home is a great commitment; in turn, you need to get informed about the things that you should expect once your loan gets approved.
It would be a great help to ask a lender if your current financial and employment status is qualified to buy a home.
The lender might ask about your employment history, your credit score, income, and asset.
This will help you make an informed decision.
Check your current financial capabilities and ask professionals before your decide to buy a home.
