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How Buying a Home is Possible for Buyers with Student Loan Debt


65% of 2018 College graduates graduated with student loan debts and 43% of them said that because of their student loans they were postponing home buying. 

Just because you have student loans, it doesn’t mean you can’t buy a home. Do student loans affect your home buying? Yes, of course. But does having student loans affect the option of you buying a home in a negative way? It doesn’t have to! 

Here are a few ways to buy a home even with student debt. 

1)Improve your credit score

Thankfully, there are plenty of ways you can improve your credit score. Here are my top three: 

  • Pay your bills on-time: on-time payments are the most important factor in your credit score. 
  • Manage your credit utilization: the ratio of your used credit balances to your total available credit lines is called your “credit utilization.” For example, if you have a credit line totaling $3,000 and your credit balance (or what you have used and owe back) totals $1,000, then your credit utilization is 30%. Ideally, you want to use as little of your available credit as possible.
  • Don’t close old accounts: you might think that by closing out a credit card account will improve your score, but that isn’t the case most of the time. While it’s important to pay off your balance(s) as quickly as possible, there is no need to close old accounts. Always talk with a lender and let them give you advice on your credit before you start closing out accounts. The longer and older your credit history is the better your score will be — as long as you keep making payments on time. Lenders like to see you’re reliable with making payments, and keeping your past accounts open let’s lenders view your credit history.

2) Decrease your Debt-To-Income Ratio 

What is Debt-To-Income? It’s the amount of monthly debt you have compared to your monthly income. To figure out your Debt-To-Income (or DTI) raito, you take your total monthly debt amount and divide it by your monthly income before taxes. 

Many lenders follow the “45 Qualifying Ratio,” which means when you divide your debts to your income it shouldn’t be more then 45%. 

If your DTI is on the higher side, here are some ways to decrease it:

  • Increase your income by taking on a second job, setting up a side gig, or asking for a raise.
  • Refinance or consolidate your student loans to obtain a lower monthly payment. You might also get a better interest rate this way!

3) Keep your credit use under 30%.
When you go to get a loan, the less debt you, the better interest rate you’ll receive — and the larger loan amount you’ll be allowed to borrow. Lenders recommend keeping your credit usage below 30%. In other words, if you have a credit limit of $5,000, you should never put more than $1,500 on that credit card. Keep your credit cards low and make payments on time. 

Don’t let student loans or other debts stop you from pursuing the options of buying your first home!  



About the Author:








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Kylie specializes in helping people who want to purchase their first home someday that might be currently feeling overwhelmed, scared, underprepared, lost or uneducated. She’s passionate about guiding her clients through a journey that’s exciting, fun and super rewarding! Kylie believes you shouldn’t have to go through it feeling alone.


How Buying a Home is Possible for Buyers with Student Loan Debt

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