Even if you don't directly use your student loan money for non-educational purposes, spending any of your own money on extras means you have less money for your education (and possibly may need to borrow more).You don't have to live like a pauper (that's just not fun for anyone), but try to keep in mind that every dollar you save (as in don't spend) is a dollar less, plus interest, that you don't have to borrow.One study indicated that 75% of college graduates with student loans said that their loan payments prevented them from buying a house or a car.Millions of college graduates are struggling under such a burden of student loans and credit card debt that the dream of home ownership may seem totally out of reach. The tips in this article can help you buy a house, even with student loan debt.However, this isn't the case when it's time to apply for a mortgage."Put yourself in the lender's shoes and imagine lending hundreds of thousands of your dollars to someone else," Ulzheimer says. " In the months or years leading up to a home purchase it's better to improve your utilization by paying off old debt. Every penny you put toward your outstanding credit card balance is a penny you can't put toward your down payment, so balance is key.Keeping your payments to 8% of your income may seem doable, but 8% should be the total of your non-mortgage debt in order for you to comfortably afford your payments.
You also get a better interest rate and waived LMI. Okay, let’s assume that you were a bad teenager and your parents don’t want to help you out. Banks have many requirements that you need to meet to qualify for a home loan.
If you have more than 5% of the purchase price in debts then it’s your mountain of debt that should be tackled first before you start to save a deposit. You can post your situation on our Disqus comments section below and one of our brokers will let you know.
As a rough guide, it’s when you owe less than 5% of the maximum purchase price that you’re going for. Open up a high interest savings account and add to it every time you get paid.
They can let you know exactly how the banks will see your situation and what you need to do to get approved.
Buying a home is a whole different story with its own factors to consider.