Mortgage Qualification BasicsIt is a fact of modern life that if you have attended college in the last decade, you are likely to carry a debt from the effort. You might have ambitious plans about how you want to live your life and find that this debt is the greatest obstacle in your path. Specifically, how do you clear the way to buy a home if you still have a balance on your student loans? Will it take half your adult life and selling your soul?

Student Loans Give You A Path To A Better Life

Fortunately, it is not as bad as all that. In fact, you may be closer to qualifying than you think. Student debt is not an insurmountable challenge, but you may have to work hard to achieve the goal of home ownership while you are still paying for your education.

The United States carries a collective student loan balance of more than $1.2 trillion, and students who graduated from college in 2014 had an average of $33,000 in outstanding loans. This level of indebtedness is a trade-off that gives graduates access to better-paying jobs in the long-term, at the expense of lifestyle and relative affluence in the short-term. The sacrifice eventually pays off even if it might seem like it never will right now.

Turning A Plan Into Action

Student loans do influence your ability to qualify for financing, but this debt counts most explicitly on your debt-to-income (DTI) ratio, which is one of the numbers that loan officers will scrutinize when they are deciding if they want to lend to you. The fact that lenders are looking at DTI rather than your total levels of debt matters because it is easier for you to reduce your monthly debt servicing costs than it is to reduce your total amount of debt.

Do not take on any more debt; hold off on buying a new car or spending on credit cards. Real estate holds and grows in value, unlike cars, possessions, and experiences, which will still be there when you are a more affluent homeowner. Contact you student loan servicer and apply to reduce your monthly repayments. Look for ways to earn extra income whether it is through a pay raise, a weekend job or by finding a better paying career.

Make Your Goal A Reality With Work Now And Experiences Later

It might require you to adjust your expectations and demand that you work hard to achieve this worthy goal, but it is possible to buy a home while you still have student loans. The best way to discover how close you are to buying your home is to start taking steps to get prequalified. You will not need a credit check as a part of the process, but it will give you a fair understanding of how close you are to your goal.

If the worst outcome would be to find out just how far you have to go in paying off your debts, it at least gives you more information on which to base the plan you execute to pursue your goal. However, in all likelihood, you will discover that your student loans are less of a burden than you had expected and that the path to buying your first home is almost within your reach.