How to Afford a Mortgage with Student Loan Debt
Experts are divided on whether student debt is affecting the housing market. A recent study by John Burns Real Estate Consulting estimated that heavy college debt will reduce real estate sales by 8 percent for this year.
Meanwhile, the Federal Reserve Bank of New York found that, for the first time in at least a decade, households with student loan debt are less likely to have a mortgage than those without student loan debt.
Others disagree and maintain that lower home purchases among millennials are more due to changing mores and attitudes of the younger generation.
The math behind the former argument is obvious: More debt means less money to save for a mortgage down payment and leads to fewer home purchases. However, that’s not the only thing holding borrowers back.
If you have student loans and want to own a home – whether in the next month, next year or next decade – you need to manage how your student loans affect your debt-to-income ratio and overall credit score to ensure you’ll be approved for a mortgage when the time comes. Here are the main things to keep in mind.
Read full article here.
Source: MSN Money, October 29, 2014