Home Buying in Saint Paul>Question Details

msred00, Home Buyer in Saint Paul, MN

I have over $50K in student loan debt. None of which is outstanding or in default. Will this effect me being approved for a loan?

Asked by msred00, Saint Paul, MN Tue Feb 26, 2013

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6
Susan Hofflander’s answer
Hi, msred00!
I'm always amazed at the amount of answers that get posted. And, the LENGTH of some of them is pretty astounding!

I think it's a good idea for you to talk to a qualified lender to determine how this impacts your mortgage approval. But, from what I know to be true, your student loan is considered secured debt, so it's different from, say, credit card debt, so it's taken by the lender as "good" debt.

It will be taken in to consideration just like your other debt vs. your income to determine what they feel comfortable loaning you for a property purchase. Luckily, the mortgage industry has gone WAAAAYYYYY more conservative on their lending practices again. It's for everyone's good.

Good luck!
0 votes Thank Flag Link Mon Mar 4, 2013
It really depends. For FHA financing, student loans can be omitted IF they are currently deferred and will remain in deferment for a minimum of 12 months after closing on your new home. For conventional financing, regardless if the loans are deferred or not the payments on those loans will be factored into your debt-to-income ratio (DTI).

Your DTI will determine your maximum purchase price. On a worst case scenario, if your DTI is over the maximum allowed, you will not be approved for financing. If that occurs, we would then explore the possibility of adding a non-occupying co-borrower (like mom and dad) or another occupying borrower to help bring that DTI down with the added income.
1 vote Thank Flag Link Wed Feb 27, 2013
This is debt and will be counted, as will your 1) credit, 2) length of credit, 3) employment and 4) past credit.

Your best bet is to sit down with you local lender and fill out the Loan Application with them.
Web Reference: http://www.GetSoldOKC.com
0 votes Thank Flag Link Wed Feb 27, 2013
Good Morning,

Lowell below is absolutely correct. All of your finacials and debts will play a role in you getting qualified for a loan. If you are a first time home buyer, there are many programs here in MN that assist with down payments if you qualify. I recommend you go talk to a local lender that is very versed on these programs to see if you qualify for any of them. In some cases it could be up to $10k.

Please give me a call and we can talk a little about your situation and I can recommend a lender or two that would be a great fit for your situation.

Vicki
Vicki Schwartz
MN Real Estate Options
Broker/Owner/Short Sale Professional
Accredited Platinum Real Estate Professional
Phone: (952) 443-2056
Fax: (952) 236-6429
Cell: (612) 801-2355
Check out our website at http://www.mnrealestateoptions.com for great information on all aspects of real estate, for Buyers, Sellers and Investors
0 votes Thank Flag Link Tue Feb 26, 2013
It will effect what lenders commonly refer to has your "DTI" or Debt-To-Income ratio. When it comes to how much you can buy purchase price wise this comes to effect.

Basically if you had zero student loan debt you could afford more than currently does that make sense?
0 votes Thank Flag Link Tue Feb 26, 2013
It shouldn't.
Call Sherri Sherpy, She's a loan officer with Lendsmart. 612-363-1106. She will be able to give you an answer right away.
Tell her Chase sent you over.

Chase
chase@sp-realestate.com
0 votes Thank Flag Link Tue Feb 26, 2013
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