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Getting a Mortgage with Student Loan Debt

Getting a Mortgage with Student Loan Debt

You’ve got the degree, you’re done with school, and you’re finally on track to start the life you’ve been working hard for. While you wait for your college investment to pay off, you might be trying to decide if you should rent or buy your next home. If you find yourself deciding between the two, check out our blog post, Should I Rent or Buy? If you’re leaning more towards buying, here are a few tips for getting a mortgage with student loan debt.

Meet with a banker

You should meet with one of our mortgage bankers before you begin searching for a home. We will go over different first-time homebuyer options to find the best fit. We’ll find out what size of monthly payment you’d be comfortable with. We’ll also talk through other considerations, such as utilities, upkeep, budgeting, existing payments, and your long-term financial goals.

Pre-qualifying

Once you’re ready to begin your home search, we’ll help you get pre-qualified. We pre-qualify using the income and asset information you provide, as well as information from your credit report. Your credit report will show any outstanding debts, including loans reported by student loan servicers. You can also get pre-qualified online!

Getting debts under control

Having a large amount of debt could reduce the loan amount you can qualify for when you’re ready to purchase your home. Check out episode four of our podcast, Common Cents on the Prairie, to learn more about reaching your financial goals. Our host, Adam Cox, shares how he paid down $200,000 in student loans!

First-time homebuyer loans

If you’re a first-time homebuyer, you may be able to take advantage of down payment assistance (if needed), tax credits, and/or reduced private mortgage insurance premiums. Additionally, first-time homebuyers may qualify for a reduced down payment as low as 3% (a 5% down payment is typically required on a conventional loan). The South Dakota Housing and Development Authority (SDHDA) offers first-time homebuyer loans, subject to income and purchase price limits. FNB offers our own first-time homebuyer loan with no income limit.

More than a mortgage

When you finance your home through FNB, you’ll get more than a mortgage. You’ll be getting a banking relationship you can count on. That’s why we’ve been the financial partner for businesses, individuals, and communities for 135 years.

Very seldom does a person live in their first house their whole life, so we look at the big picture and make sure you’re taking steps to be successful well into the future. Most of our mortgage lenders were personal bankers first. We don’t want to just get you into the house; we want you to be financially successful in the long term.

Contact one of our mortgage lenders today to learn more about getting a mortgage if you have student loan debt. We’re happy to walk alongside you in the journey to home ownership.

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