Is It Possible to Own a Home When You have Student Debt?

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Everyone wants to succeed in life. Whether it’s getting a new car, landing their dream job, or getting a house for their family, everybody wants to be able to leave the ideal life that they’ve been striving for much of their adult lives. Of course, one of the best ways of getting to a good life is by having a good educational background. Most of the time, those that do have college degrees are already equipped with industry-specific information, which makes them well-prepared for professional work. Indeed, having your own bachelor’s degree can have a multitude of different advantages.

But even in the United Kingdom where there is a responsive and versatile education system, a good percentage of students need to avail of student loans in order to finish their degrees. There is more than 17 Billion GBP total worth of loaned money to students each year, with the value of loans surpassing a total of 140 Billion GBP as of March.

The government predicts the total value of loans throughout the last 50 years to reach around 560 Billion GBP. That said, a good number of students that finish their degrees have raised questions and concerns regarding their loans. After college, most of these young professionals might need to find a steady source of income to pay off these student loans.

But whether if a student took a loan or not, they will also need to be self-sufficient throughout most of their adult life. This means being able to afford their own car and or even taking a mortgage loan so that they’ll be able to have their own house.

But is it really possible to juggle both your student debt while still being able to get your own home? Here’s what you should know.

Is It Possible?

The short answer to this question is: yes, it is possible. A longer answer would be: It will depend on how well you can handle your finances. Juggling between student loans and a mortgage is not an easy task, especially when these loans tend to last years before they are fully paid.

Debt-Income Ratio

One of the guaranteed ways of improving your chances of getting a mortgage loan is by showing them that you are capable of answering your debt with your income. Normally, your debt-to-income (referred to as DTI) is an important factor that most lenders will take a look at when they weigh in on your financial capabilities.

Naturally, these lenders will need to ensure that you have a constant flow of cash that you will be able to handle for your would-be mortgage payment. This is a great way of staying on course, even when you do have existing debt.

Suppose you’re looking for a home that’s affordable while being easy to maintain in the long run. In that case, you might want to commission the services of responsive and responsible real estate agents that can find the right home that’s geared towards your financial needs and wants. Fortunately, there are estate agents are known for finding the right home just for you.

For most mortgage loans, you will need a ratio that’s no higher than 30 to 39 percent; this is considered an acceptable risk. Don’t worry; if you don’t fall under this threshold, there are some things that you can do to increase your likelihood of getting a mortgage:

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Pay Your Debts

First and foremost, you can pay down your debt as soon as possible. When you are chipping down your student loan debts or any debts you might have, you increase your likelihood of having an approved mortgage. If possible, you can use your tax refunds and any benefits that you might have at work. Making a dent in your existing balance can have a lasting impact on your financial reputation.

Increase Your Income

Another tried and tested way of increasing your chances is directly addressing the issue of income. If you have been working in the same job for a long time, you’ll have every right to ask for a raise. Other than that, there are online freelancing sites that you can apply for that will help give you a boost in your income, which significantly improves your DTI. There are so many hours in a day, and you can start building a higher income for your career or line of work.

Consolidate Student Loans

Another great way of lowering the monthly amount that you will need to pay is by improving your DTI. By doing so, it’s easier to have a higher DTI.

There is a multitude of ways to increase the likelihood of getting a home, even when you still have a student loan. We understand that paying off a student loan can be mentally and physically taxing, especially for those that need to start working right after they get out of college. It is definitely possible to juggle between mortgage and student loans. It might seem like a tall order, but as long as you do your best in paying off your debt in a timely manner, it’s going to be easier on your part.

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