Buying A Home Despite Student Loan Debt

If you’ve watched more than a few minutes of news in the last five years, then it’s no surprise that Millennials are changing the financial landscape of society. Since Millennials are graduating college and obtaining graduate degrees at an exponential rate compared to previous generations, they are also accruing substantially more debt. It is estimated by the National Association of Realtors (NAR) that student debt is preventing 83% of Millennials from owning their own home. This has serious implications for the economy, developers, realtors, and Millennials. But, all hope is not lost and it actually is possible to buy a home despite student loan debt.

Real estate agents can help inform Millennial buyers about their options, but only if they know what those are, and according to a 2016 ATTOM survey, few buyers and agents know the options. The biggest solution to help Millennials buy a home despite their student loan debt are down payment assistance programs. On average, buyers who use these programs save close to $18,000 over the lifetime of their loan! This is a great option for buyers that are struggling to save for a down payment because these programs typically offer closing cost assistance or down payment grants for up to 5% of the loan amount.

The U.S. Department of Agriculture (USDA) also offers low and no-down payment options, as well as first time home buyer assistance, and rural home loan programs, which many residents in the New River Valley qualify for. These programs can roll a lot of the costs like closing costs into the actual loan which eases the burden of needing a lot of cash upfront to purchase a home.

Each state offers homebuyer assistance programs, too. Although not all of these are targeted toward people with student debt, each program has the goal of helping people purchase a home. There are also special mortgage companies that specifically support homebuyers with high levels of student debt, like SoFi Mortgage, for instance. However, the rates and packages offered by these companies do not always make long-term financial sense.

If someone has student loan debt, they should ask their real estate agent to put them in touch with a trusted financial and home loan expert. Experts can typically present multiple options to potential buyers and explain the pros and cons of each choice. But, the bottom line is that it is possible for people with student loan debt to be homeowners. The key to making it happen is working with trusted real estate agents and brokers and conducting thorough research to determine which option is best for long-term financial health and homeownership.