Student Debt Relief and Homeownership
The Biden administration has come through with some big moves to eliminate $10k in student loan debt for so many. Now how does this impact potential homebuyers??? Student loans are a hurdle for many that are looking to buy a home. One of the biggest factors to qualifying for a home loan is the debt to income ratio or comparing all monthly obligations vs all monthly income. Stating the obvious here but by eliminating debt, Biden just made it easier for many to qualify for a mortgage. There is more to it here though – Biden just increased purchasing power! Think about it this way, let’s say $10k in student loans equates to $300 in monthly payments. So if your max budget for your mortgage payment was $2000 before, by wiping out $300 in other debt payments, you can stretch your budget for the mortgage to $2300. This example equates to affording about and extra $50k on the purchase price. That could be the difference between settling for a house and buying a home you’re proud of. If you are looking to buy a home and have student loans, first give Joe some thanks and then give us a call!