The Federal Reserve reported that in 2019, the typical monthly student loan payment was between $200 and $299, though some borrowers have much higher minimum payments.ĭepending on your loan balance, staying current on your loans might mean that you don’t have much money left over each month. If you were to buy a $250,000 home with a 6% down payment, that means you’d need to have $15,000 saved. According to a survey on down payment trends from the National Association of Realtors, in 2019, the median down payment was 12% for all homebuyers, but it was just 6% for first-time homebuyers. When you take out a mortgage, you typically have to pay a percentage of the home’s price as a down payment. You May Not Be Able to Save for a Down Payment If you have a significant amount of student loan debt, your minimum monthly payments may push your DTI ratio over the 43% mark, making it difficult to get approved for a loan.
The max debt-to-income ratio to get a mortgage is 43% or less. Lenders use your DTI ratio to determine if you have enough income after satisfying your other obligations to afford the mortgage payments. When you apply for a mortgage, lenders will look at your debt-to-income (DTI) ratio: the total amount of monthly debt payments you have divided by your gross monthly income. Loans Can Increase Your Debt-to-income Ratio Student loans can affect your ability to buy a home in the following ways. Student loans can be a heavy burden, but you may not realize how they can impact other areas of your life, including your goal of becoming a homeowner. If you’re like most college graduates, you left school with student loan debt. How Student Loans Can Affect Your Ability to Buy a Home
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