Mortgage and Student Loans

Discussion in 'Credit Talk' started by jfpruitt, Jun 20, 2001.

  1. jfpruitt

    jfpruitt Well-Known Member

    If I have a student loan for 30K and no other debt. I have 4 CC with no balances. I have a perfect record no late payments at all. I also have already paid off my car loan. If I make about 35K a year and make 287 in Student loan payments, but no rent b/c I live at home, will I be able to get a mortage?? So all I pay a month is 278 in student loans. How will the banks look at me eventhough I'm still technically in 30K in debt?????
  2. KristyW

    KristyW Well-Known Member

    I used to be in the mortgage business, and your situation shouldn't be a problem - It depends on your loan amount and what the payments are.

    For most "A" mortgage programs, you need to be ~28% of your total gross income for your mortgage payments, and ~36% of your gross monthly income for your total payments (excluding stuff like utilities, insurance, groceries).

    For $35K, your monthly gross income is: $2917.

    The maximum mortgage payment for your situation is:
    2917 x .28 = $845.

    The maximum total debt you can have is:
    2917 x .36 = $1050

    So with your payment of $237, can you go for the maximum mortgage payment?
    1050 - 237 = $813,

    You may be able to with a flexible loan program, but some mortgage companies may make you stick to $813.

    Now, how much of a loan can you afford?

    For a 30 year mortgage at 7% and approximately $1000 in yearly taxes, you can afford a $125,000 loan.

    Remember, I'm just giving you estimates. Hope this helps.
  3. jfpruitt

    jfpruitt Well-Known Member

    Wow!! That is a BIG help!!!!!!!! I can do a 125k home...I was just wondering how that worked.

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