If you have student debt and worry about how it will affect such things as applying for a mortgage, you have less to fret about than you may think. Here are some things to keep in mind:
Lenders don’t just look at your debt, they look at your income.
Lenders also view student loan debt more favorably than credit card debt.
Another thing to consider is your down payment – the more you put down, the less of a risk you are to lenders.
Mortgage lenders often try to get you to consolidate your student loan debt to a 30-year term to minimize your student loan payments. While this can help you qualify for a larger home mortgage, it can also add thousands of dollars to your student loan costs.
Find out more on how your student loans play into the home mortgage equation.
What's the rush to get into more debt??? I don't mind renting in a crappy apartment and paying off my school loans for a few years before I think about buying a house. Heck, I'll even live with my mom until then! No big mortgage for a fancy new house for me please. I have better things to do with my life than to get tied down for 30 years.
Don't assume that banks affiliated with your University or banks that claim to cater to your academic/career choice (for example, a mortgage company that specializes in MDs for clients) is a better value. Shop around. Your financial aid office may be able to give you some advice on what to look out for. Know you credit report inside and out BEFORE you apply for a mortgage. The FTC allows you to get your credit report annually for free (www.annualcreditreport.com - don't confuse that with paid services websites with a similar address.) Fix any errors on your credit report before you make your first mortgage application - be prepared to explain any negative hits too.