March 28, 20263 min read
Homebuyers often hear a rule of thumb, but prime mortgage underwriting is more detailed than that. Student debt does not automatically block a mortgage, but the required payment can reduce the amount of housing debt you are able to carry.
Where borrowers get tripped up
Here is what matters most:
- Lenders include a monthly obligation for student loans using their policy and the documentation available.
- A low interest rate on the student loan does not mean the payment is ignored for mortgage qualification.
- If the loan is deferred, the lender may still assign a qualifying payment rather than treating it as zero.
- Reducing other high-payment debts can sometimes have a larger affordability effect than aggressively paying down low-payment student debt.
Have the actual student-loan statement available so the broker can model the file correctly.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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