Your Lake of the Ozarks Mortgage Lender: homeownership with student loans

Wednesday, April 25, 2018

Can I Get a Home Loan While Still Paying Off Student Debt?

One common misconception about getting a mortgage at the Lake of the Ozarks is that you can't have any student loan debt. While it's true that your debt-to-income ratio will affect your mortgage approval, having some debt is okay - actually it's even better than having none at all. Keep reading to learn about getting a mortgage while you're still paying off your student loans.

Student Loan Debt vs Credit Card Debt

The first thing to understand is that there's a big difference between student loan debt and credit card debt. Debt itself is essentially borrowing from your future self. However, with student loans, you are investing in a better future. You'll be more employable and earn more with a college degree. During the loan application, your Lake of the Ozarks mortgage lender will take a look at not only how much debt you have, but what type of debt it is. Having student debt is okay, but having a lot of credit card debt might raise some issues. Talk these things through with your lender, he or she is there to help!

Facts About Student Loan Debt

Below you will find 6 things you should know about student loan debt:

40% of the nation's total student loan debt is from graduate degree debt, not undergraduate
75% of borrowers age 20-30 have monthly student loan payments of $400 or less (50% of those borrowers have monthly payments of $203 or less)
$351 is the average monthly student loan debt payment, while $750 is the average extra monthly earnings for a college degree
15% is the approximate rate of return on a college degree
42% of student loan borrowers owe less than $10,000
Of homeowners age 31-35, 35% have a high school diploma, 39% have a bachelor's degree or higher and DID NOT borrow money for college and 50% have a bachelor's or higher and DID borrow for college.

As you can see, student loan debt isn't as big of a problem for most people as some may think it is. Many homeowners have purchased a home with student loan debt still on their plate, and chances are, so can you. You'll just want to make sure you have everything else in order.

If you're considering purchasing a home at the Lake of the Ozarks, give me a call at 573-746-7211 today. As your mortgage professional at the Lake of the Ozarks, I'm here to help you every step of the way. I'll discuss your options, offer competitive interest rates and back it up with the first-class service you deserve. Don't worry about your student loan debt just yet, come talk to me first!

For Lake area news, resources and tips on financial services, please

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Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct: (573) 746-7211

Cell: (573) 216-7258

e-Fax: (866) 397-0318

Email: mlasson@fsbfinancial.com

Website: www.YourLakeLoan.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

Tuesday, July 12, 2016

Should I Buy a Home When I Have Student Loan Debt?

Becoming a homeowner is likely the largest financial investment you'll ever make. As someone fresh out of college who is working on paying off those student loans, the dream of owning a home at the Lake of the Ozarks can seem like just that, an unreachable dream. How are you going to save enough money for a downpayment? Or do you not have to? Keep reading to learn if purchasing a home while you're paying on student loans is an option for you.

Homeownership

Many factors should be taken into account when choosing to purchase a home. While renting does not allow you to build equity in your own home, you may question whether adding more debt in the form of a mortgage is the best idea for your budget. Does becoming a homeowner at this point make sense?

Examining Debt

Not all debts are the same. With student loans, your asset is your education, which no one can take away from you. However, if you have mortgage debt and can't afford your payments, your home can be taken away. In addition to your credit score, your mortgage lender at the Lake of the Ozarks will look at your debt-to-income ratio. Depending on how much student loan debt you have, that ratio may be too high to purchase a home at this point in your life anyway. In order for a mortgage to be backed by the government, this ratio can't exceed 43% of your income.

Renting vs. Buying

With all-time low mortgage rates and rising rent costs, homeownership may seem like the best option. However, money isn't the only consideration you need to make. Are you planning to stay put in the same place for awhile, or are you unsure where you want to end up living? If you're planning to stick around the same area for at least two years, then buying might make sense. In this case, buying is more financially advantageous than renting in 70% of housing markets.

Downpayment Options

As someone with student debt, you may be struggling just to make your income match your expenses, let alone have any extra to save for a downpayment. While there are some low downpayment loan options available, the size of your downpayment will affect the total cost of your loan. The less you have to borrow from the bank, the lower your monthly payments will be. You'll also be saving money on interest. Keep in mind though, that you don't want to wipe out your savings to make a downpayment. It's important that you keep a cushion for closing costs, moving expenses, furniture shopping and any unexpected expenses that could arise with your new home.

Buying a home at the Lake of the Ozarks shouldn't solely be based on money though. Are you ready to take on the responsibility of caring for your own home? When you rent, the landlord takes care of any issues you may have, but once you buy, that's all on you. If you have questions regarding becoming a homeowner, give your Lake of the Ozarks mortgage lender a call at 573-746-7211. I'm here for all your home financing needs, and will discuss your options, helping you every step of the way!

For Lake area news, resources and tips on financial services, please

LIKE my Facebook Page, Follow me on Twitter or Connect on LinkedIn

Michael Lasson

Sr. Loan Officer

NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B

PO Box 1449

Lake Ozark, MO 65049