How student loans can impact home buying
Ready to buy a home? Many people think the biggest challenge for young homebuyers is coming up with the funds to buy their dream home. But there's a new challenge for would-be homebuyers who do make enough money, but have significant college loan and grad school debt. This debt-to-income ratio is becoming a common roadblock to home ownership.
Pay down the debt as much as possible.Lenders do not count debt against you as a potential borrower when you have less than 10 payments left on the loan.
Involve a family member in the mortgage process.A financial gift towards a home's down payment can reduce the total amount you need to borrow.
Get a cosigner.Standard FHA loans allow a non-occupant co-signer, so if your parent or relative is willing to cosign the loan, it can help increase their debt-to-income ratio and better your chances of obtaining a mortgage.
Buy with a friend.If you don't have the finances to obtain a mortgage on your own, pairing up with a friend may increase your chances of obtaining a mortgage - assuming you both don't have considerable college debt. This should be a well-thought out decision, but for some buyers it can be a viable solution.
To get a fair assessment of your financing options, it's most important to have an in-depth discussion with a lender up front. TD Bank's recent Mortgage Service Index found that buyers who had open communication and regular, in-person discussions with their lender during the mortgage process had a more positive home buying experience overall. So choose a lender that is available and ready to work with you. If you have questions or are ready to begin, call one of our mortgage experts today at 1-866-325-4516 or you can read more about the TD Bank Mortgage difference.
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