Don’t Let Student Loans Hold You Back from Homeownership

by Melanie Gundersheim

Yes, You Can Buy a Home with Student Debt

Student loan debt is more common than ever. According to the Federal Reserve, over 40 million Americans carry student loan debt — and yet, many of them do go on to become homeowners. The key is understanding how lenders view your financial picture and what steps you can take to strengthen your application.

What Lenders Really Look At

When applying for a mortgage, lenders aren’t just looking at your student loan balance. They’re evaluating:

Your debt-to-income ratio (DTI): This compares your total monthly debts (including your student loan payments) to your monthly income.
Your credit score: A strong credit history can offset concerns about student loans.
Your income stability: Consistent income is a key factor in proving you're a reliable borrower.
Your savings: A solid down payment and cash reserves can improve your odds of approval.

Pro tip: If your student loans are in deferment or income-based repayment, lenders may calculate your monthly obligation differently — which is why it’s important to work with a mortgage professional who understands the nuances.

Steps to Take Before You Buy

If you’re carrying student loan debt but want to move toward homeownership, here are a few smart steps to take:

Know your numbers. Get pre-approved so you can see how much home you can afford — and what loan programs are available to you.
Focus on your credit. Pay down credit cards, make payments on time, and dispute any errors on your credit report.
Reduce your DTI. Paying off even small debts (like car loans or credit cards) can improve your DTI ratio and increase your buying power.
Explore first-time buyer programs. Many states and lenders offer programs specifically for buyers with student debt — including down payment assistance, flexible underwriting, and more.

Homeownership Is Still Within Reach

Student loans may add complexity to the homebuying process, but they don’t have to be a barrier. With proper planning and the right support team, you can take steps today that move you closer to owning a home — even while paying down debt.

💡 You don’t have to choose between paying off student loans and building a life you love. Let’s talk about your options and start creating a plan to turn your homeownership dreams into a reality — no matter where you are in your financial journey.