If you’re dreaming of owning a home but feel weighed down by student loan debt, you’re not alone and you’re definitely not out of the game. Many first-time homebuyers ask me the same question: “Can I buy a home even if I have student loans?”
The short answer is: Yes, you can.
The long answer? It depends on your unique financial picture—but student loans don’t automatically disqualify you. In fact, understanding how they affect your homebuying power is the first step to turning that dream into a plan.
What Lenders Really Look At
When you apply for a mortgage, lenders evaluate more than just your credit score. One major factor is your debt-to-income ratio (DTI)—which compares your monthly debt payments (like student loans, car notes, and credit cards) to your monthly income.
There are two key types of DTI lenders consider:
- Front-End Ratio: Your potential mortgage payment vs. your income
- Back-End Ratio: Your total monthly debt payments (including your future mortgage) vs. your income
If your student loan payments are high, that can reduce the amount of home you qualify for. Even if your loans are in deferment or forbearance, many lenders still calculate a payment using a percentage of your loan balance.
So… Can Student Loans Lower My Buying Power?
Yes—but not always in the way you might think.
A $100,000 student loan balance doesn’t matter as much as your monthly payment does. If your payment is low—or if you’re on an income-based repayment plan—that helps your DTI and increases your approval odds.
It’s also worth noting that different loan programs have different rules. Some government-backed loans (like FHA or USDA) are more flexible with student loan debt than conventional loans. The key is finding the right mortgage product that fits your situation.
4 Ways to Improve Your Buying Power (Even with Student Loans)
Here are a few strategies to get closer to the keys to your new home:
1. Explore Income-Based Repayment Plans
If you’re on a standard repayment plan with a high monthly payment, switching to an income-driven plan can lower your monthly obligation—and boost your DTI ratio in the eyes of a lender.
2. Consolidate or Refinance (If It Makes Sense)
Simplifying multiple student loans into one payment could reduce your total monthly cost. But be sure to do your homework—consolidation isn’t right for everyone.
3. Pay Down Other Debts
Sometimes it’s not the student loans, but your other debts holding you back. Knocking out a credit card or auto loan can create breathing room in your budget and DTI.
4. Take Advantage of Homebuyer Programs
Many first-time buyer programs offer assistance—even for those with student debt. Some are designed to help with down payments, others may even factor in your student loans differently when calculating approval.
A Mindset Shift Worth Making
It’s time to stop thinking of student loan debt as a dead-end and start seeing it for what it really is: a factor, not a dealbreaker.
The truth is, millions of Americans are balancing student loan debt—and thousands of them are becoming homeowners every day. You can be one of them. What you need is a plan.
📅 Ready to Create Your Homebuying Plan?
Let’s talk about your situation.
I offer free homeownership planning calls where we look at your current finances, discuss your student loans, and create a roadmap to help you buy your first home—even with debt in the picture.
➡️ Schedule your planning session today: https://bit.ly/HomeOwnershipCall
Together, we can turn your dream into a strategy and that strategy into keys in your hand.
Sabriyah Callis | NMLS 2537498 | Equal Housing Lender
💬 Let’s Keep the Conversation Going
Have questions about student loans and buying a home? Drop them in the comments below or connect with me on social. And don’t forget to subscribe for more tips, tools, and real talk about the journey to homeownership.
Until next time—dream it, affirm it, own it.
FTC Disclaimer: This is not a sponsored video or article. All opinions are genuinely my own. This post also contains affiliate links and I earn a small commission if you make a purchase after clicking on my links. It does not cost you any extra. Thank you for your continued support to keep the Bri Callis Blog going!
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