There’s a pretty big misconception out there that if you already have debt, you shouldn’t buy a home. This is partially true: if you have mountains of credit card debt, pay day loans, a car loan, and bad credit, you should probably work on that before looking to add to it. But, when it comes down to getting approved for a mortgage, what really matters is your 1. credit score and 2. debt to income ratio. What does that mean? Check out this post by The Frugal Toad for more:
In fact, as long as you complete a bachelor’s degree or higher, the negative impact of your student loan debt on your probability of homeownership is negligible. Take for instance folks who graduate with a bachelor’s degree and no student loans. They have a 70 percent probability of owning a home. Others, with the same degree and $50,000 of student loan debt, have a 66 percent chance of homeownership. So, the debt only reduces odds of homeownership by 4 percent.
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