Will our student loan prevent us from buying a house?

Asked by Stephanie, North Richland Hills, TX Tue May 1, 2012

My husband and I are planning on buying our first house. Our annual income is $34,000 plus $1,500-2,500 in bonuses. We have good credit (around a 715 average). However, we have a student loan that is in defferment. In one year we have the option of choosing two more years of defferment or start repayment at $180 per month. We do not have any car payments risht now and we have about $7,000 to put towards down payments and closing costs. If we can afford $1,000 per month in rent payments I know we could afford to pay the mortgage ect. on a $95,000 house. I just hate that the rent money is being wasted by not going towards an investment. Will our student loan stand in our way of buying a house?

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, ,
Fri Jul 7, 2017
There have been many changes in the last few years regarding student loan debt with all the major government sponsored entities (GSEs) including Fannie Mae, Freddie Mac, FHA, and VA.

A few years ago the guidelines got more restrictive but within the last few months they are loosening.

Generally speaking it's better to take the loan out of deferment and start making payments. Fannie Mae, for example, will allow lenders to count whatever figure shows up on the credit report as long as long as that payment is greater than zero.

Unfortunately, FHA is still requiring the lender use either 1% of the balance as the payment amount or they require documentation that the payment will amortize over the life of the loan.

Feel free to reach out for more details on how the guidelines would be applied in your situation. We lend everywhere in the United States.

Bernard Guste, MBA
Gulf Coast Bank and Trust
New Orleans, LA
0 votes
Brandy, Home Seller, Texas
Thu Jun 13, 2013
We had no problems when we bought our house with student loans a car note and personal loan! we were 22 and bought the house i believe for only 3% down! now the monthly payments may be higher or lower depending on the credit score though! just a little food for thought
0 votes
, ,
Tue May 1, 2012
The student loans have to be deferred for 12 months or MORE at closing to exclude from debt ratios on an FHA loan. 11 months and 29 days is NO DEAL.
Student loans cannot be excluded on conventional loans

You should talk to a lender.... Most of the good ones will gladly prequalify you over the phone based on your provided data.
A pre-approval(stronger than prequal because we take a full loan ap and credit) would come after you apply if the loan officer thinks the debt ratios are ok during the prequal conversation.

With cash reserves... some files can close with extraordinarily high debt ratios. But don't count on that until the loan officer takes a FULL LOAN APPLICATION and does their due diligence.

I will happily take your follow up questions. No obligation.

Tom Burris
Mortgage Banker
(214) 763-4629 cell/text/nights/weekends(Really!!)
Lending all across the entire Great State of Texas!!
NMLS# 335055
Search Dallas area MLS for FREE. No registration => http://www.ntreisinnovia.net/cgi-ntr/BR_login?0501134
0 votes
Bruce Lynn, Agent, Coppell, TX
Tue May 1, 2012
Best thing we can do is get you prequalified with a lender. They will have debt ratios you have to meet that will determine purchase price/loan amount. But that's the best place to start.

Let me know if you need a referral.

Anything we can do to get your income up. Second job, more hours, etc.

You can search for homes at the link below.
0 votes
Don Groff, Agent, Austin, TX
Tue May 1, 2012
It depends on how they look at it and what your ratios are. If the payment will or can be deferred for an additional 2 years they may not count it against you. You should speak with a lender so they can tell you if it would be a problem or not. Also, make sure you can handle the payments even if a lender tells you its OK you are the one who has to live with the payment.

Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157
listings@dongroff.com | http://www.AustinListed.com
0 votes
Dallas Texas, Agent, Dallas, TN
Tue May 1, 2012
Recommend contact a mortgage broker who can review your loan app for the approval process.

Contact my office today
Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
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