Buying a home with student loans trauma (a bit longish) but please HELP!

posted 3 years ago in Money
Post # 3
Member
846 posts
Busy bee
  • Wedding: October 2015

I don’t really have any advice to give because I’m not sure what the better option is as far as applying together or separately.

I just wanted to say that I understand about your student loan situation. I also have government loans and up until now, I haven’t made enough money to begin making payments either. And I’m on the income based repayment plan. 

But with my current job, I finally am making enough money but guess what my monthly payments are? $60 per month. Again, still on the income based plan. 

I owe about $36k total, including interest. My salary is only $22k a year. And interest accrues every day so I’m not even making a dent in the loans at all 🙁

Anyway, my point is, I completely understand what you’re going through. But the thought that comforts me is that at least I am making payments on time. I’ve never missed a payment. And maybe someday my income will drastically go up and I can finally begin making a serious dent in my loans. 

And hey, if I still haven’t paid it all off in 25 years, my debt will be forgiven. 

As long as you’re making payments in full and on time, then you should be okay getting a home loan. I think. As long as you’re doing it with your FI and the bank is counting his income too. 

But I’m not sure. I’m not an expert so hopefully someone else that has better knowledge of the mortgage/home loan process can give you better advice than I can. 

But just hang in there! I know the school loans are daunting but you will be fine, I promise 🙂

Post # 4
Member
8425 posts
Bumble Beekeeper
  • Wedding: April 2013

@renwoman:  I think it depends on a few things (i.e. how much you make, how much your FI makes, etc), but I think the best thing would be to ask your lender.  They will be able to tell you what will be best in your particular situation.  That being said, many people get home loans while still paying off their student loans, just be sure to look for something that you’re both comfortable paying every month.  Best of luck.

Post # 5
Member
1987 posts
Buzzing bee
  • Wedding: June 2014

I’m in almost the same situation as you, except I have a ton of private loans on top of my federal loans.  We’re talking down to under $140,000 (total – federal and private) after paying them for a few years.  My payments are $1300/month.  My fiance has no debt and makes more than me.  We also want to purchase a home in the (nearish) future.

I don’t really have much to say other than I know how much this sucks ass.  I’m following this thread to see if anyone has any advice on this situation – I sure need it too! :-/ 

Post # 6
Member
3280 posts
Sugar bee
  • Wedding: June 2014

Yes, I’d definitely say only apply under his name. If your monthly debt is more than like 1/4th of your monthly income then adding you is only going to lower your chances of being approved for a loan. They will only base it off his income as to what amount they will loan, but that is probably your best bet.

Post # 7
Member
285 posts
Helper bee
  • Wedding: July 2015

@renwoman:  as long as you’re in good standingb with your loans, it should work with you on the application.  There are a few options that can give you loan forgiveness and wipe off some if not all of your loan.  Certain health careers give you that option.  Joining the reserves in any military branch will also help.  And I believe peace corps or is it job corps?  Hmmm…. can’t recall.  Anyways, there are also companies that will help you lower your payment.  They help you with plans to help pay it off as well.  I know that maybe you are planning for a house sometime soon, but why not take the next two years to continue to save up for all the moving costs and use a large sum of your taxes to put on your loans?  

Post # 8
Member
64 posts
Worker bee

My H and I purchased a home this past October (before we were married). He has no debt and I have a shitton of studen loans plus a vehicle loan. What they looked at for us is our bank accounts and how much money we both had saved and our monthly incomes (because both of our names were going on the deed). They take loans into consideration, but ultimately you buy a house based onwhat you can afford to pay monthly.

Before we got approved, we sat down and added up how much both of us made in a month. Then we subtracted all of the payments we made plus groceries, gas, nights out, etc. Then with that number left we set a MAX amount that we wanted to spend on our home – taxes, mortgage and insurance.

We were approved for over double what we wanted to spend. We told our finance guy that we wanted to spend $x or less and he told us what price range to look at. He also said that (at that time) mortgages were about $5 per every $1,000 on a house. So if a house was $100,000 your mortgage only would be around $500.

Sorry to ramble lol, but my point is that even though I have loans up the butt I still had great credit (better than H!!) and there were absolutely NO problems whatsoever with us purchasing our home. Stick to a comfortable monthly amount and you should be okay.

Post # 9
Member
866 posts
Busy bee
  • Wedding: September 2013

@renwoman:  I don’t know enough about this stuff to be sure but will your credit effect his once you guys are married?  Like, even if he applies for the loan by himself, will they still be entitled to look at your credit?  If so, then you guys probably need to buy before you get married.  If not, then definitley just apply under him.  The loan you would qualify for (with the 2 incomes if you applied together) is almost always more than you can afford.  Since you have all these loans, it’s not a bad idea to take it easy on the first home so that when you do start making money, you can pay down the loans fast.  Just my 2 cents.

Post # 10
Member
496 posts
Helper bee

Once you are married, why can’t you both tackle your debt together? If you don’t then it will be difficult for both of you to get a home. I would just start sending every extra dollar I could to the debt. No eating out and cut my cell phone bill as much as I could. You could ask for a hardship deferral/forbearance for a few months and use that time to pile up an emergency fund of 1000 and a month or two extra payment.  It will be tough but you just need to try to pay down as much as you can and as fast as you can. I listen to the Dave Ramsey show online and it has helped me pay off so much debt. DO the debt snowball calculator and it might help you figure out how fast you can pay it off. Good luck!!!

P.S. I am in the same boat and have been paying off these student loans like crazy, which has helped me feel so much bette

Post # 11
Member
11300 posts
Sugar Beekeeper
  • Wedding: August 2013

Okay, take a breath.

Many, many people with student loans are able to purchase their own homes. Student loans are seen as “good” debt, because it was something you used to better yourself and get a better job after graduating. It’s still debt, but looked at differently than consumer debt (credit cards and whatnot). As long as you’re in good standing with your loans, you will be okay. You can always speak to your realtor or loan officer about it before you apply and they can help you determine whether or not to apply together or under just his name. 

Post # 12
Member
3476 posts
Sugar bee
  • Wedding: May 2012

A lot of people have student loan debt.  It’s not expected that you pay it off in 1,2, 3 or even 5 years, that’s why it’s on a ~25 year repayment schedule.  Initially it can be tough, but as your income increases you can put more towards paying it off.  My loan payments from grad school at one point were over a thousand.  Just work on paying it down, cutting costs etc. 

Talk to your mortgage broker and ask them for advice.  It probably depends on how much debt you really have and how much house you are buying.  They want a certain percent of income left after paying debts/expensives (I can’t remember how much exactly).

Post # 13
Member
2642 posts
Sugar bee
  • Wedding: September 2012

Don’t worry about it!  Remember, there is good debt and bad debt.  Bad debt can prevent you from getting a loan, but good debt won’t.  Student loans are considered good debt and TONS of people have them.  As long as you are making your payments, it shouldn’t really affect your ability to get a mortgage.  The only way I could see it having an adverse affect is if most of your paycheck (like 75% + ) is going towards student loans and you barely have any money left over.  In which case, you might not be approved for as much as you hoped or have a higher interest rate.  But since you’d be applying with your FI, I’d bet you would still get approved (if it were just you, then I’d be a bit concerned).  And if all else fails and you don’t like the amount or interest rate, you can look at applying for a loan only in your FI’s name.

I have a lot of student loans (around $40K) and H and I just bought our first house.  We didn’t have any issues getting approved.  I also have several friends with student loans also buy houses.  The big factors will be your credit score, debt-to-income ratio, and your downpayment. 

I think the best course of action is to talk to a lender.  I would try and get pre-approved for both you and your FI and if you don’t like the terms (interest, amount, etc.) then you can see what everything would be if only your FI applied for the loan.

Good luck and don’t worry!

Post # 14
Member
7098 posts
Busy Beekeeper
  • Wedding: August 2012

Do you know how much your loan payments will be once you start paying them?

Post # 15
Member
47 posts
Newbee
  • Wedding: June 2012

I have a lot in student loans and H has none. We were able to get a loan based of just his income even tho I am also contributing to the household. We still filed our taxes together but just used his information. This only works on a conventional loan. Any other loans you will need to use both incomes.

Because of the state we live in, I am on the deed even though I am not on the loan.

Post # 16
Member
1193 posts
Bumble bee

I had over 75k in student loans, a car payment, good credit, and a good job. I bought a house with no problems. They look at your credit score and your ability to make the mortgage payment (amongst a million other things).

They will, however, approve you for an amount that is probably too much. The bank calculates exactly how much they think you can pay every month, and offer you an approval based on that. Not considering that you need to eat, gas up the car, and perhaps go on vacation or buy some clothes. So take their number with a grain of salt and figure out between you and your DH exactly what you want to spend.

Leave a comment


Sent weekly. You may unsubscribe at any time.

Find Amazing Vendors