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How likely is to get a home loan from a bank when having over $60,000 out in school loans?

meg - 2009-08-27 13:49:20 - Renting Real Estate

I graduated from college last year and am wanting to buy/build a house. I am curious about how likely it is to get approved for home loans when I have around $60,000 in debt from school. Is this even an option for me right now?

Best Answer:

It all depends on your Debt to Income ratio. Basically, if you are making $4,000 a month before taxes, a bank will try to make sure that your total payments (student loans, car, and house payments) does not exceed 35% of your pre-tax income. So if your total payments of long term debt would exceed about $1,400, chances are that you will get turned down. Also, a lot of banks are requiring 75% loan to value on properties. So unless you have 25% to put on a down payment, or can obtain a virtually unsecured loan for the downpayment,you might be out of luck at the moment. This is all assuming you have a good credit score of 700+.

Answers:

depends on your credit score and your debit to income ratio. I would seek a pre-approval letter for financing thru your current bank - before seeking out a property to purchase. that way you know if you are qualified and your price range.

it all depends on your income and credit. The monthly debts on these will be included in your debt to income ratio I am a mortgage banker in TN

It all depends on your Debt to Income ratio. Basically, if you are making $4,000 a month before taxes, a bank will try to make sure that your total payments (student loans, car, and house payments) does not exceed 35% of your pre-tax income. So if your total payments of long term debt would exceed about $1,400, chances are that you will get turned down. Also, a lot of banks are requiring 75% loan to value on properties. So unless you have 25% to put on a down payment, or can obtain a virtually unsecured loan for the downpayment,you might be out of luck at the moment. This is all assuming you have a good credit score of 700+.

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