Recently, student loan debt has been a major hurdle for prospective homeowners. Today, more than two-thirds of college graduates have student debt, compared with less than 50% in the early 1990s. In addition, the average balance for today’s college graduates is $30,000, versus $9000 back then. A $30,000 balance equates to a $400 monthly payment, which can impact the ability for the prospective home buyer to qualify.
As of 2017, Fannie Mae made it much easier for home buyers with student loan debt to qualify for a mortgage, by allowing lenders to consider their lower, and more flexible student loan repayment plans. The two types that are most commonly used are extended term payment plan, which would spread the payment over a longer period, and income-based repayment plan which would allow for your current income to play a factor (some payments as low as $0) in how much your monthly payment will be.
Overall, there are alternative options to a hindering student loan debt, that will allow you more flexibility when looking to purchase or refinance a home.
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Sources:
https://cnb.cx/31UykSC
http://bit.ly/38rB2I3
By: Jon Iacono