Don't Let Debt Delay Your Home Buying Dreams

Between Common Misconceptions About Student Loans and Home Buying Power and a New Announcement From The Three Major Credit Bureaus, Your Financial Portfolio May Be Stronger Than You Think.

Are you one of the millions of Americans who dream of becoming a homeowner but feel shut out by other financial burdens? Whether it’s medical debt, student loans, or a multitude of financial obligations, many prospective homebuyers wrongly feel they are “disqualified” from homeownership because of these circumstances.

Student Loans

If you’re worried your student loans mean you have to put your homeownership goals on hold, you’re not alone. In fact, many first-time buyers believe they have to delay their plans. According to data from the National Association of Realtors (NAR): “When asked specifically about the purchasing of a home, half of the non-homeowners say student loan debt is delaying them from purchasing a home.” 

When asked why their student loans are putting their plans on the back burner, three key themes emerged:

• 47% say their student loans make it harder to save for a down payment
• 45% say they think they can’t qualify for a home loan because of existing debt
• 43% say they believe the delay is necessary even though they’ve never applied for a mortgage

No matter which reason resonates most with you, you should know a delay may not be necessary. In the same NAR report, data shows many current homeowners have student loan debt themselves: “Nearly one-quarter of all homebuyers, and 37% of first-time buyers, had student debt with a typical amount of $30,000.” That means other people in a similar situation were able to qualify for and buy a home even though they also had student loan debt. 

Medical Debt

Is medical debt ruining your credit score? We have fantastic news. According to CNN, “Three of the country's largest credit reporting agencies are removing nearly 70% of medical debt from consumer credit reports. Equifax (EFX), Experian (EXPGF), and TransUnion (TRU) will eliminate billions of dollars from the accounts of consumers who faced unexpected medical bills that they were unable to pay.” These changes begin on July 1st of 2022.

Next Steps

What does this mean for a future homebuyer? No two situations are the same. The best way to make a decision about your goals and properly identify your next steps is to talk to a professional. If the reason you’ve been concerned about qualifying for a home mortgage is medical or student loan debt, contact our team to get answers. We can bust many of the myths that prevent first-time home buyers from taking the next step, such as how much you really need for a down payment. (Hint: It’s much less than you think!) We can also recommend trusted local lenders who have proven experience getting first-time home buyers qualified.  

A great Realtor will walk you through your specific situation, your options, and what has worked for other buyers like you. You don’t have to figure this out on your own – lean on the experts so you have the information you need to make an informed, strategic decision.

With rent prices skyrocketing, the ever-increasing value of homes, and the equity you can build by buying early, there is no time to wait. Contact us now to see how you can get started!