You Can Buy a Home When You Have Student Loans
Published: November 30, 2025
If you're worried that your student loans will prevent you from buying a home, you're not alone. Many potential homebuyers feel the same way. But here's the good news: having student loans doesn't mean you can't buy a home.
The key is understanding how lenders evaluate your financial situation and what steps you can take to improve your chances of approval.
Watch: Expert Advice on Buying a Home with Student Loans
Understanding Debt-to-Income Ratio
When lenders evaluate your mortgage application, they look at your debt-to-income (DTI) ratio. This is the percentage of your monthly income that goes toward paying debts, including student loans.
How DTI Works:
- •Most lenders prefer a DTI ratio of 43% or lower
- •This includes all monthly debts: student loans, credit cards, car payments, and the proposed mortgage payment
- •Student loans are just one factor in this calculation
Strategies for Homebuyers with Student Loans
1. Explore Income-Driven Repayment Plans
If you're on an income-driven repayment plan, your monthly student loan payment may be lower than the standard payment. Lenders typically use the actual payment amount shown on your statement, not the total loan balance.
2. Consider Refinancing
Refinancing your student loans could lower your monthly payment, which improves your DTI ratio. However, be aware that this may affect your eligibility for federal loan benefits like forgiveness programs.
3. Save for a Larger Down Payment
A larger down payment reduces your monthly mortgage payment, which can help balance out your student loan payments in your DTI calculation.
4. Work with a Knowledgeable Lender
Not all lenders treat student loans the same way. Some lenders have programs specifically designed for borrowers with student debt. Work with a lender who understands your situation and can guide you through the process.
The Bottom Line
Student loans don't have to be a barrier to homeownership. With proper planning, understanding of your financial situation, and the right lender, you can still achieve your dream of owning a home.
Remember: Many successful homebuyers have student loans. The key is to work with experienced professionals who can help you navigate the process and find the best path forward for your unique situation.
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