Buying a Home with Student Loans


Thinking of buying a home but stuck with excessive student loans? You’re not alone. According to the Student Loan Debt Clock provided by, more than 45 million Americans hold $1.6 trillion in student debt. As someone with student loans, you may be worried about your mortgage loan qualification. Contact a Loan Officer at Lendova today to see what you will be eligible for and how your student debt will be evaluated.

How will mortgage lenders evaluate my student debt?

For mortgage lenders, it’s not the amount of student debt you owe but how much you’re obligated to pay towards those loans every month. A significant factor in determining your mortgage eligibility is your Debt-to-Income (DTI) ratio. DTI is your total monthly debt payments divided by your total gross monthly income. In other words, Lendova will consolidate your monthly minimum credit card payments, student loan payments, auto loan payments, and any other loan payments you may have, along with your future mortgage payment. Then, that number is divided by your gross monthly income. The result of this calculation will be your DTI ratio. Lendova will use this DTI ratio to determine how much money you can borrow without stretching yourself too thin.

Although a lower DTI ratio is ideal, Lendova will accept a DTI ratio of up to 50% for creditworthy borrowers.  Therefore, if you can reduce your monthly debt payments by paying off credit cards or refinancing your student debt, you can increase your mortgage opportunities significantly.

Furthermore, if someone is assisting you with your student loan payments, such as your parents, Lendova may be able to disregard the monthly obligation in your DTI calculation as long as we receive proper documentation.

What is the down payment requirement?

It’s possible that your student debt payments can also impact your ability to save money, making it challenging to arrange enough funds to cover your down payment and closing costs. It is a common misconception that you need to have at least a 20% down payment. Lendova offers low down payment loan options starting with down payments as low as 3% down. A majority of Lendova buyers put less than 20% down on their homes.

What kind of loan is right for me?

Finally, if you are shopping for a home loan and are still working on paying off student loan debt, talk to our commission-free Loan Officers to see what your best options are. At Lendova, our Loan Officers are always here to help you, regardless of where you are in the process.

By Lendova