With rapid globalization, lives have become difficult to live. Today approximately 69% of people in the USA have taken on loans. The majority of youth don’t own a home and when asked why, they blame the loans. They feel it is difficult to enter a home along with a loan. Everybody dreams of owning a home one day, and often the thought of finances stops us from taking this step. This article will help you understand how to buy a home despite having a student loan.
How to Buy Home Despite Having a Student Loan
First things first, before taking on another loan you must keep the following things in mind:
Good Credit Score
A good credit score ensures higher chances of getting the loan. When you avoid new credit lines, you create a positive impact on your score. How much available credit do you utilize? As a credit card owner, you must lessen your credit utilization rate. The lesser the rate, the better your score. Lastly, the most important factor to have a good credit score is to pay your bills on time. Yes, paying your bills on time is the best and the easiest way to gain a good score. When you pay your bills on time, it assures the lender that you are responsible. This adds up to your chances of getting a loan.
First Timer Home Loans
When you plan to look up for a home, look for different offers, and study different banks. See which bank will benefit you the most. Being a first-timer and a millennial, you may find some beneficial offers, which might include a lower interest rate, no down payment, etc. This can work in your favor especially when you have a student loan.
Down Payment Assistance
Consider down payment assistance as an option. This is a bit different from the down payment option. These assistance programs help you pay down payments and loans, too. You can find them under the following terms:
- Down payment grant.
- Forgivable Second Mortgage.
- Traditional Second Mortgage.
- Matched Saving Program.
If you have a good credit score, a stable income and you are a first-time home buyer, then you can opt for this program.
Now, you may ask whether or not should you pay your student loan first. This completely depends on your financial conditions. Your DTI ratio, credit score, and interest rate are other factors that play a role. With hard work, dedication, focus, and passion you can not only buy a home but also pay off all your debts quickly.