Are you a student paying loans, but still desiring to purchase a home? Qualifying for a mortgage while paying off your student loans may seem difficult, but it is possible. However, here are some ways your student status may affect your mortgage.
Before approving you for a mortgage, lenders consider the debt-to-income ratio. The ratio generally compares a person’s overall income to their monthly debt payment. Lenders may deny you a mortgage if your debt-to-income ratio is high. At Midland Mortgage Corporation, you get different loan programs that fit your budget. Lenders consider your student loan as part of your monthly debt. Therefore, you should ensure that your student loan payment, along with all of your other debt payments, is 43 percent or less of your gross monthly income.
If you do not make your payments on time, you are likely to reduce your credit score. When determining who qualifies for a mortgage, lenders consider credit scores. If your score is below 620, you might not get a mortgage. The moment your student loan is 30 days past due, your credit score is likely to reduce. Ensure you pay your student loan payments on time. Midland Mortgage Corporation offers you flexible refinancing options like lower interest rates.
If you are on loan deferment while applying for a mortgage, then you will not initiate the payment plan on it for 6 to 12 months. This plan allows you to stop making loan payments temporarily. Basically, students who are undergoing financial tribulations are considered qualified for deferment.
If you are dealing with a student loan and need a mortgage, contact the experts at Midland Mortgage Corporation to get the best assistance.