The following article is a guest post.
Look at it this way:
You’re a student trying hard to make your dreams of a good education come true, and that has driven you into debts. In essence, you’ve taken some student loans to cover your school fees and have been repaying them on a monthly basis. However, you happen to be the smart type that thinks way ahead in life. You want to buy a house, but the student loans have been a draw back.
To realize your dream, you need a plan. Now the question is: is it really possible for you to buy a house while still servicing your student loans? Is there a way or plan that you can work on to make this happen? If there is such a plan, what do you need to do to make it work?
The fact is that you can actually buy a house even with the burden of student loans. You just have to be smart. Here are some smart tips you can use to your advantage and turn yourself into a home owner soon enough:
Find a Starter Home.
Some people miss the whole point of cost-saving when it comes to buying a home.
If you’re a student already burdened with student loans, the first thing to hit your mind should be about how you can manage to buy a house while still servicing your student loans. For one, you don’t want something that’ll prove too much for you. You want an affordable house.
To this end, you should consider looking for a cheap home to start with, especially if it’s your first time to buy a home.
It’s true that shopping around for a home to buy can be a little tempting with all the beauty of expensive homes and utilities in them, but you need to prioritize your financial health. Don’t get too mesmerized by homes with beautiful patios and huge yards that would prove much costlier to buy.
In addition to getting a starter home, you get to enjoy the benefits of tax incentives when you but a house early. That means you would save a little bit more of your money.
Keep a Sharp Eye on Other Debts.
The thing with mortgage lender is that they hate people with bad credit records. You’re not going to make it through the application process if they find out that you’ve been skipping payments to some of your other debt repayments. One of these issues that could really “rat you out” is your credit card.
If you’re smart enough, you should be minimizing your credit card debts way before you even apply for a mortgage. This will impress the lenders who evaluate your mortgage eligibility based on your credit score, income, debt-to-income ratio, and your total savings.
You see, lenders like doing business with people with good financial health. These assessments tell the lender whether you’re capable of remitting all monthly payments for your home loan. This helps you meet the lender’s no credit loan repayment standards. And puts you well on the path of getting a mortgage for that nice house you’ve been drooling at.
Reduce The Monthly Payment for Your Student Loan.
If you’ve been committing a sizable proportion of your income to repaying student loans, you should consider reducing that to a more flexible amount.
For one, reducing these payments works well to improve your debt-to-income ratio and make your mortgage application more appealing to the lender. That’s because it proves to them that you’re earning more money than you’re spending in a month. Which in turn puts you in a more favorable position for your mortgage application to go through. You definitely want that.
A good trick that you can employ in cutting back on your student payments is consolidating the whole loan into a more manageable one. With this, you get to fork out less in monthly payments and save some cash in the process.
This saved money can then be used to cover a part of the monthly payments for the mortgage. That’s exactly what a smart person would do!
Remit Your Student Loan Payments on Time.
You know what mortgage lenders hate most? It’s people who keep skipping payments.
The best way to get your mortgage application thrown out at first glance is to demonstrate your inability to remit your monthly payments on time. That’s why you’re going to find a way to beat that eventuality. There’s a way to do that.
Always (or at least a few months before you apply for a mortgage), make sure you pay your student loans on time. When the lenders check your payment background and find that out, you’ll stand a better chance of getting a mortgage approval by virtue of your credibility and commitment to paying back what you owe your lenders.
Save Up for a Mortgage Down Payment.
Nothing makes banks and other lenders out there happier than a debtor with a plan.
You see, making up your mind to apply for a mortgage is as easy as ABC. But it takes a brilliant person to actually plan for it way before they embark on the process. One way of planning for this is by saving up some down payment for the mortgage.
This plays out in your favor to demonstrate to the lender that you’ve an actual plan to pay the loan and that you’ve been planning for a while. That’s how you win the lender’s confidence and trust and get a mortgage cover regardless of the amount you owe in student loans.
Buying a house has never been easier. With a plan, you can get yourself a nice starter home and still pay back your student loans with much ease. From the above-covered points of smartness, you realize that all your need is a good plan and the guts to make it work. Implement the smart plan and own a home.