Do Student Loans Make a Difference?

When purchasing a home, most people do not realize that student loan debt is factored into your qualification process. Why? Student loans affect your debt-to-income ratio and the ability to pay your mortgage. Making regular payments on your student loans will help when attempting to qualify for a mortgage, but any delinquencies could seriously impair your chances of getting approved.

If you don’t have a long credit history, paying your loans on time will reflect positively in your favor. You may be in a situation where your debt-to-income ratio is too high, and you will either have to renegotiate or consolidate the terms of your student loans, or pay them off to get approved. Do not rule out the option of a co-signer or a larger down payment. This could assist in getting you approved for a lower loan.

Lenders are very serious when evaluating student loan debt, so having a positive payment history is key. For more information on mortgages and student loan debt, contact Avis Lending. We are happy to help you!

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