Student Loans: Can I Still Get a Mortgage With Student Debt?
YES, you can still get a mortgage with student loan debt!
Outstanding debts like student loans, medical bills, or credit card debt aren’t actually all that important when loan officers are determining your eligibility for a mortgage. As long as you have reliable income, stable finances, and your required monthly payments don’t use too much of your monthly income, you’ll probably qualify. When determining your eligibility for a home loan, the most important number that loan officers will look at is your debt-to-income ratio (DTI). It’s a calculation that takes your current monthly income and compares it to the total amount you owe every month in required, recurring payments, such as:
- current rent or mortgage payments
- maintenance fees or HOA fees
- car payments
- home insurance premiums
- minimum credit card payments
- court-ordered payments like alimony or child support
- any other required payments like student debt or medical debt
Debt-to-income ratio does NOT include expenses like food, clothing, travel, entertainment, contributions to savings or retirement funds, or other non-recurring expenses. As a general rule, if it’s above about 47%, you won’t qualify for a conventional mortgage.
If your debt-to-income ratio is too high right now, focus on paying down one or more of your debts to lower or eliminate some of your monthly payments. You may still qualify for other types of mortgages, like FHA loans. The best thing to do is meet with a loan officer about it! They can either find a mortgage that works for your finances, or help you make a plan to lower your debt-to-income ratio and qualify for a mortgage in the future.