And How They Apply to a Mortgage
When it comes to life changing purchases both acquiring a mortgage and acquiring a student loan are both near the top of the list if not fighting for the pole position on most peoples list. Out of the estimated twenty million Americans who attended or attend college this year as many as sixty percent take out loans to help cover the cost of their education. These debts have a bad habit of sticking around even until the debt holders late thirties and an additional seventeen percent report still paying off some form of student loan.
With these daunting numbers it is no wonder many millenials are waiting longer and longer to purchase real estate. Many reports indicate that this trend is holding true with the reported average first time home owner being close to thirty five. This shows that millenials are renting or living with relatives for as long as possible to reach less debt from their student loans.
What does this mean if you do possess student loans and want to procure a mortgage however? The answer might surprise you. According to many financial institutions seeing a profile with a form of student loan doesn’t necessarily mean that you will be unable to get a student loan. There are factors to help over come this sizable debt to an underwriter including:
- making regular on time payments
- ensure a steady income so your debt to income ratio will allow for growth.
Even just following these two tips can easily increase the willingness a lender might be to accept your loan.
However just as paying on time can enable you to get a mortgage it is critically important not to miss a payment, as a late payment or delinquency can lower your credit score dramatically.