Student loan debt is a hurdle facing many millennials as they become interested in becoming first-time homebuyers. But is it a hurdle that can’t be overcome? Here’s the skinny on student loan debt and mortgages.
Yes, you read the title right – student loans can help you get a mortgage. How? Well, there are a couple big ways that your student loans, and your history with them, can help you in your pursuit of a mortgage loan approval.
- Payment history – In terms of your credit, payment history is worth the most – 35% of your score. That’s a big number and it is going to be significant to your mortgage banker if you have a good payment history with your student loans. Not only is this the biggest credit determination factor, it’s also the easiest to control – just make your payments on time, every single month.
- Credit building – Without using credit, you have no credit. And sometimes, having no credit can be as bad as having bad credit. This is especially significant when you are trying to qualify for a mortgage loan. Without credit, your mortgage banker has less proof that you are not a risky investment. Student loans in good standing, even if they are your only form of credit, can work toward building your credit.
If you’re interested about learning the steps to becoming a home owner, check out our First Time Home Buyer’s Study Guide, or call and talk to a mortgage banker at 1-888-914-2276.