Five Steps to Qualify for Your Home Sweet Home

 

Spring is here, which means new beginnings sprouting in your garden – and possibly a new home! If you’re beginning your search, you might be looking forward to weekend open houses and pleasant home buying weather. But, besides your must-haves for an excellent school district, walk-in closets, and shiplap walls – thank you, Joanna Gaines – do you know what it takes to make this major purchase?

It begins with qualifying for a mortgage loan. While it’s not as exciting as furniture shopping or housewarming parties, knowing how to qualify will make the process a whole lot more curb appealing.

Is your student loan debt stacking up against you?

You might be surprised how your student loan debt could affect the qualification process.

  • Your credit score. Credit scores give loan providers a glimpse into how much debt you’re carrying and your repayment history. Significant student loan debt, or failed or late student loan payments each month could be damaging your credit score.
  • Your down payment and savings. While some loan types require a low down payment, as well as cash for other out-of-pocket expenses like home inspections, application fees, closing costs and more. You might find it hard to put away any savings, let alone the amount needed for a home purchase, due to your monthly student loan payments. And, if you don’t come to the table with any savings, you may not get an approval.
  • Your debt-to-income ratio. Lenders look at your current debt management compared to your income, and predict your ability to take on a new obligation, like a mortgage payment. If your student loan debt compares to the national average, which is around $40,000, your debt-to-income ratio might be a roadblock. Yep, even if you’re paying your bills on time and have a down payment.

Fives ways to qualify for your dream home!

Resolving these issues before falling in love with a house you won’t qualify for is well worth the work – we promise! Plus, we have some simple solutions to get you started.

  1. Review your credit report. Review yours for free with Equifax, Experian or TransUnion, and make sure there aren’t any discrepancies or inaccuracies that need to be reported or cleaned up – AKA, potential fraud or long forgotten, past due payments.
  2. Reduce your debt. During the home buying process, it’s helpful to not only reduce your debt but also to not take on any new debt, like buying a car or applying for another credit card.

 

  1. Save. Be sure to put anything you save towards your new home fund to cover all those bottom-line incidentals.

 

  1. Pay on time. Ensure your bills are all up-to-date, and you’re consistently making payments on time.

 

  1. Get pre-approved faster through My Education Solutions. MES offers an income-based repayment program that can help you lower your student loan debt and qualify for a new home loan or refinance. Enroll with MES and:
  • Lower your monthly student loan payments by up to $400 on average, and increase your buying power by up to 30 percent – hello, bigger yard!
  • Receive a customized pre-approval letter for mortgage lenders for conventional and VA loans.
  • Bonus! A money-back guarantee pending your mortgage lender’s pre-approval means no pre-approval, no enrollment fee.

Carrying student loan debt doesn’t mean you’ll never have your “home sweet home.” Learn more about true student loan forgiveness and our no-risk program by calling 1-800-618-1170 or checking out our Student Loan Forgiveness Calculator at www.myedusolutions.com to see if you qualify in a few easy steps.

Sources:

https://www.moneycrashers.com/getting-approved-mortgage-loan/

https://www.usa.gov/credit-reports

https://www.experian.com/blogs/ask-experian/what-is-the-average-student-loan-debt/