Road Block To Getting A Mortgage

Getting approved for a mortgage can be a difficult and sometimes stressful process- especially if you’re a young person, fresh out of college, who may be going through the process for the first time. You have to worry about disposable incomes, credit scores, mortgage rates, and the list goes on and on.

(Seriously, most of us are just excited to know what actually constitutes as “disposable income” and where to find our credit scores)

But there’s one thing that could severely be holding you back from getting that beloved mortgage you want:

Student. Loans. (queue the thunderstorm effects)

Student loan debt has surpassed auto loan and credit card debt in this country, finally coming to rest at a whopping $1.2 trillion amount…

Oh wait, did I say “coming to a rest”… because that idea is laughable. The last time the debt was measured it was estimated at a $1.2 trillion amount but it is still growing…and growing…and growing, leaving more and more young adults trapped by their crippling debt. It’s no wonder that so many people are feeling the effect of student loans in other areas of their lives, including the mortgage process.

Whether you are making payments, in deferment or forbearance, or in default…student loans can still be an obstacle in regards to qualifying for a mortgage.

Luckily, there is a different route to get to your final destination

Did you know if you consolidate on your student loans several things can and will happen:

In most cases, consolidation lowers the out of pocket monthly payment on the student loan which allows for more disposable income, which your broker can then use as extra leverage in your case of getting a mortgage
Consolidation decreases the line items of revolving credit on your credit report
Consolidation brings any defaulted student loans you might have back into good standing
Consolidation can assist public service borrowers in qualifying for public loan forgiveness, thus providing you the opportunity to keep more cash in you pocket

Pretty cool, huh?

What other road-blocks have you found in regards to student loan debt interrupting your mortgage process?

Katie Bentley