One common misconception about buying a home is that it is just not possible to do while you are going to school or paying off student debt. This is simply NOT true. There are many people that buy a home while they are still paying off student debt. Below is a list of ways to make your home ownership dreams come true while you still have student debt.
- Qualify With a Co-Signer
One way to qualify for a home loan while your debt ratios are high due to student debt is to get a close friend or family member to co-sign with you on the loan. This allows you to use their income, combined with your own, to help you qualify for a higher loan amount and a better rate. It is not uncommon for first time home buyers to co-sign with a parent or close significant other to get into their first home.
- Gift Funds
Another common tool people use to get into their home is using gift funds to help with a down payment. A higher down payment means a lower loan amount, which means a lower monthly payment. This improves your debt to income ratio and helps you qualify for a better home. There are many people that receive gift funds from parents, grandparents, or other family members to help them get into their first home.
- Programs with Low Down Payments
If finding money for a down payment is the issue, there are many programs that require low, or no down payment. FHA only requires 3.5% down. HomeReady and Home Possible loans only require 3% down. Options for no down payment include VA loans for veterans and military members or USDA loans for people purchasing a home in a rural area.
- Down Payment Assistance Programs
There are also loan programs that assist with covering the cost of a down payment. Utah Housing loans offer a second, subordinate loan to cover the cost of the down payment. This second loan has its own interest rate and monthly payment, however, this is usually combined into your total monthly payment so you can pay the loans off simultaneously.
As you can see, there are many different ways to buy a home, even if you are still paying off student debt. Everyone one has different needs, which is why we are so fortunate to have so many different loan options to help everyone make their home ownership dreams a reality. Talk to one of our qualified loan experts if you have any questions on any of these programs or if you are wondering if you can qualify for a home loan in your current situation. We have options for everyone from first time home buyers, to an experienced home owners looking to refinance. Your needs are our focus when we help you get into the home that is right for you.