12 08, 2020

Buying a House with Student Loan Debt

2021-09-28T16:49:52+00:00August 12th, 2020|Blog, Buying a home, Home Finances, Mortgage 101, Tips & Advice|

With the student debt amounts more than tripled from the 90s, there have been less millennials buying homes for many reasons. A big factor in the hold up for millennials is the amount of student debt they carry. With an average of $30,000 in college debt, plus the debt of auto loans and credit cards, buying a home may seem impossible but there are ways to overcome this barrier and purchase a home.

How Does Student Loan Debt Affect Your Chance of a Mortgage?
Good question. The biggest factor this plays is increasing your debt-to-income ratio. The lower your DTI ratio, the better you look to a lender. Since your student loan payments are factored in to your DTI ratio, the lower your student debt, the better. If you have student debt on top of consumer debt, work to pay off your consumer debt (credit cards, car loans, etc.) first. If you’ve managed to only have student debt then your first step should be to get that lowered.

Additionally, if you’ve missed payments on your student loans then that will negatively impact your credit score. If you’ve made payments on time then that may improve your credit score. The amount you pay per month on your student debt can also be factored in to your debt-to-income ratio. If you’re concerned that the amount you pay on your loans could negatively affect your chances of being approved for the mortgage you need, look into a repayment option that offers a lower monthly payment.

What Options Do You Have if You Cannot Pay off a Large Amount of Debt Right Away?
Your loan officer will look at all your options with you to find out which type of loan would work best for your situation. Sometimes a conventional loan isn’t the best fit for you and nobody […]

5 08, 2020

Fixer Uppers: Pros and Cons

2020-08-06T18:28:55+00:00August 5th, 2020|Blog, Buying a home, Tips & Advice|

Sometimes the idea of a fixer upper seems like a goal that can be reached until you get into the process of actually doing the work, hiring someone to do the work and ultimately paying for the fixes. However, if you’re considering buying a house that needs serious improvements, here are a few things to keep in mind.

Benefits

There can be some major upsides to buying a home that needs improvements. For a first-time home buyer who may not be able to afford the type of home they want or the location they prefer due to demand, a fixer upper can allow that freedom. If you want to skip the starter home phase but fear you can’t afford a larger home, a house that needs some improvements may be a great fit while giving the additional space at an affordable cost. The flexibility in location, size, style and cost are key factors when someone chooses a fixer upper.

Disadvantages

Of course, a house that needs a lot of work comes with some drawbacks. For example, the time that your home is unlivable. If the improvements are structural or affect rooms like the bathrooms and kitchen, the home will not be able to be moved into until some of those improvements are finished. So, if you are on a strict timeline, that could cause an issue. Another disadvantage comes with finding a reliable contractor to do the work. You’ve probably heard stories from someone who hired a contractor that didn’t complete the job, made the situation worse or disappeared before the work was complete. That’s a reason you may have to wait for a contractor with a good reputation to be available.

Financing a Fixer Upper

If your goal is to purchase a fixer upper, you will want to talk to your loan officer about the […]