How Much Debt Is TOO Much?

Posted on February 28, 2020

Have you ever heard someone say. “I really wish I could buy a home, but just this one thing is holding me back.” We’ve heard it a thousand times! On a regular basis one of the biggest reasons people think they can’t is because they have Student Loans. Maybe you can relate?

I get it, I really do.

Student loan debt is becoming one of the biggest factors PREVENTING people from buying a home. 83% of non-homeowners say that student loan debt is preventing them from becoming a homeowner!

When we shared this with them, they changed their minds!

While student loan debt can make it more difficult to be approved for a home loan it is NOT impossible! One of the biggest issues when qualifying for a home loan with student debt is how much that debt affects your DTI(Debt-To-Income) Ratio.

Your DTI Ratio shows a lender how much of your monthly income goes towards your recurring MONTHLY DEBTS. A lender wants to make sure that you can not only handle the monthly obligations you have, but that you could add on a monthly mortgage payment.

DTI = Total MONTHLY Debt Payments

GROSS Monthly Income

Because of this a mortgage lender cares more about your MINIMUM MONTHLY PAYMENT for your student loan debt payment rather than the TOTAL AMOUNT OF THE LOAN. For example, even if you have $100,000 in student loan debt, but your monthly payment is $150, the $150 will be used to calculate your back end DTI Ratio rather than the total $100,000 due.

Even if your monthly student loan debt payment is high a lender may be able to help you figure out your NEXT STEPS such as refinancing or consolidating your student loans in order to have a LOWER monthly payment or utilizing several first time homebuyer programs which allow for a HIGHER DTI Ratio and can even provide DOWN PAYMENT assistance.

Did we change your mind?

If you’d like to learn more about how buying a home with student loan debt is possible COMMENT DOWN BELOW!

Justice Roberts Loan Officer

Justice Roberts

Branch Manager
NMLS# 1269831
206-408-1241
Email Me
Apply Now!

Over the last ten years my family and I have struggled moving from one place to another never staying long anywhere. It was a nightmare changing schools, forwarding mail, packing. Team Justice helped us get the home we've always wanted they helped us put down roots. We are happy to have worked and continue to work with them they go above and beyond. Even helping us refinance. Made buying a home enjoyable.

Viola H.

Justice did a great job with me. Actually better then great. I consider him my life long mortgae man. I highly recommend him and his team. They went above and beyond what they had to do and closed my loan so smoothly and seamlessly and in a very fast time.

Mark D. | Tacoma, WA

The timing of needs and the communication was the best I've ever experienced..bar none! The ease in which documents were submitted and signing of others is phenomenal. I would highly recommend them to anyone I meet..but only if you want exceptional service.

Joseph W. | Tacoma, WA

Justice and his team were an integral part of our home buying process. They made it so easy and explained everything in great detail what we needed to purchase our first home. I would highly recommend this team to anyone. So personable and answered all my questions on the spot with accurate information. Thank you so much!!

Dominique B.

Justice and Jessie where absolutely great to work with, very professional, timely, and on it, I will always do my home lending with them. They made sure to check in with us at least once a week through out the process that lasted over 4 months, not once did I feel like they got tired of working with us or anything. They always have such a great attitude and always wanting to help!

Wascar Carpio

It’s been a pleasure to work with Justice and his team. If you are wanting constant communication through your loan process, immediate response to your questions via email or text, professionalism, and someone to trust as you make a big decision such as buying a home, look no further than Justice and his team. You all have been wonderful to work, thank you again!!

Maria S. | Edmonds, WA

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Note: “Loan approval and rate is dependent upon applicant’s credit, collateral, financial history and program availability at time of origination. Rates and terms are subject to change without notice. This is not a loan commitment or guarantee of any kind. 1265 Corona Pointe Court, Suite 301, Corona, CA 92879. ©2019 Paramount Residential Mortgage Group, Inc. (NMLS ID 75243) has the following Licenses: CA Department of Business Oversight, Residential Mortgage Lending Act License#4131268 and Finance Lenders Law License #603D903, AZ Mortgage Banker License #910387, Georgia Residential Mortgage Licensee #32807, IL Residential Mortgage Licensee #MB.6760962, Kansas-Licensed Mortgage Company, #MC.0025196, MA Mortgage Lender License #ML75243, ME Supervised Lender License #SLM12384, MS Department of Bank and Consumer Finance, NV Mortgage Broker License#3693, License by the NH Banking Department 17393-MB, License by the NJ Banking Department and Insurance, OH Mortgage Broker Act Certificate #MB.804171.000, OR Lending License #ML -4437 Dept. of Banking in the Common Wealth of PA#37894, RI Licensed Lender #20112799LL, and is also approved to lend in: AL, AK, AR, CT, DE, DC, FL, HI, ID, IA, KY, LA, MD, MI, MN, MO, MT, NE, NM, NC, ND, OK, OR, SC, SD, TN, TX, UT, VA, VT, WA, WV, WI. Governed by the CO Department of Real Estate.www.nmlsconsumeraccess.org (12/17/19).” Powered By Loan Officer X.

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