By Adam Lofgren
Assistant Vice President, Mortgage Lending
NMLS # 1087502
INB mortgage lenders now have some flexibility in calculating your debt-to-income ratio if you have student loans. This change can make it easier to qualify for a loan, and it could make you eligible to buy a home.
While this is a seemingly small change, it can have significant impact. If you carry college loan debt and it kept you from qualifying for the home you wanted, now is the time to talk with me or any INB mortgage lender.
Statistics May Seem Daunting
According to Forbes magazine, student loan debit is now the second highest consumer debt category behind mortgage debt. Other stats:
- Over 44.2 million people carry student loan debt.
- The average student in the class of 2016 has over $37,000 in loan debt.
- 70 percent of bachelor’s degree recipients graduate with debt.
- Total student loan debt in the United States is $1.31 trillion.
More to Home Loans than Student Loans
While I’m focusing on student loan debt, many, many more factors go into deciding if you qualify for a mortgage loan. Let’s talk about down payments, employment history and income.
- Down payment: You will need a down payment. Some resources say you’ll need at least 10 percent of the home’s value. This amount varies by individual, and you should talk to your lender about what you will need in your specific situation. To learn more about down payments and how to be prepared for the expense, read what INB Mortgage Lender Todd Weir has to say.
- Employment history: Lenders like to know that you will be able to repay your loan, and employment is key. If you earn a salary, employment history of two years is often sufficient. Again, this can vary by individual. For example, if you are a commissioned employee, lenders will likely want more than two years of history. If you’re self-employed, here are some things to consider.
- Income: Related to your employment history is your income. You will need to have a salary or other income that allow you to cover your expenses. If you need help understanding your debt-to-income ratio, contact an INB mortgage lender for help.
For other tips on home-buying, check out this blog post by my colleague Aaron Sapp.
INB lenders now have some flexibility in calculating student loan debt into your debt-to-income ratio. If you’ve been turned down for a home loan before because of your student loan debt, now is a great time to talk to us.