Description: The passage below is about navient login. The content covers the fact that many people want to buy homes for themselves, but in fact they can not do that because of the restriction of student loan. The author will share how student loans affect home buying and what those people can do to solve the related problems.
This is Calvin Russell, CEO and Founder 850 club credit consultation, hope everyone is doing well, today I have a question, I’ve been getting a lot especially for the situation that a lot of people that have student loans, they want to know how it affects them buying a home and it does affect you buying a home.
Unfortunately, student loans are accounted against your debt-to-income depending on the lender, they’re probably going to take a certain percentage and they’re going to assume if you were making payments on yours.
If you let me just break it down a little bit like this, if you’re making payments on your student loans, you probably have a certain set payment, that could be five dollars a month, ten dollars a month, twenty dollars a month, even a hundred dollars a month, that’s not how most lenders are going to calculate.
They’re going to take the overall amount and they’re going to divide it by 25 years and they’re going to go, the average interest rate is usually about five to six percent, that’s what most lenders do, that number comes out, they’re going to add that to your debt-to-income, your monthly debt to income.
Once they do that, then that’s going to adjust the amount of work about your purchasing power, for example, if a person has $50,000 in student loan debt and a person that has seventy five thousand in student loan debt, the one that has seventy five thousand dollars worth of student loan debt is going to get approved for a lot lesser amount,
Assuming though income is going to play a major role, so they’re going to look at income, they’re going to look at everything you pay monthly that is credit based, so for example, your cell phone bill does not count your rent, does not count your people and blow up people’s gas, but allow me to Illinois, so your gas bill does not count your electricity bill does not count what counts.
Things that are on your credit report, that’s what counts credit cards, so they look at your monthly payment for all of your credit cards, if you look at your credit report, there’s a monthly payment, even if it’s a minimum monthly payment, they count that against you, so they’re going to count everything that’s on your credit report, so that’s going to be your credit cards, that’s going to be your auto loan.
If you have student loans, then that’s going to be account it against you, most lenders will take your total amount of student loans divided by 25 years and they’re going to go the average rate of about 5 to 6 years and that’s going to deck.
I’m going to come up with a payment, then that’s going to be added to your debt-to-income, that doesn’t matter if you have nothing. I think the cutoff is 20 thousand or something like thatm anything less than that their property is going to look at whatever structured payment that you have now.
All that counts against you, when you’re looking for a home that goes against your DTI also known as your debt-to-income now, every lender is going to be different in terms of the max debt-to-income, some lenders will go 50% that the national average is about 43%.
But some lenders go a little bit higher, forty five forty nine fifty fifty two and that’s debt-to-income, what that means is that they’re going to allow you to have more houses, does that mean that you can shop around for rates with different lenders?
But the process takes a longer time, it’s not getting a car, we’re getting a car, you go to a dealership, you have 30 days, the FICO algorithm, not the Credit Karma credit Sesame, not all that other stuff that uses Vantage 3.0 is nothing wrong with Vantage 3.0, but vanna’s 3.0 does not.
It counts every single inquiry against you and FICO, they give you the rate shopping law the rate shopping law is that you have 30 days to go to Vanessa only for auto loans and that’s for home loans you can get, you have 30 days to get that to do what they call a rate shop.
That means that you can go to a dealership day, go to another dealership day three another dealership day ten and shop the rate the thing is that all the rates are going to be about the same, because everyone’s using about the same banks in the auto industry versus going into the home industry.
The rates are going to be the same, but the buying power may be a little bit different, because every lender is different, this is true story, one of my clients went to a bank and they said that he can get one hundred and twenty five thousand, he went to another lender and now he was able to get one hundred and eighty thousand, that’s a huge difference, all he did was to change lenders, that plays a bigger role and again every letter is going to be different.
But they won’t be able to tell you every single number unless they’ve run your credit, unfortunately, then not only that they look at tax documents check stubs all this stuff, so it’s a lot of time, it’s very time-consuming, it’s time but that’s how your students are going to affect you, it’s going to go directly against your debts that your debt-to-income.
It’s very unfortunate, because by doing what everyone told you to do, go to school, get good grades, get a good job, but now it makes everything a lot more difficult to go into homeownership and that kind of sucks, because you did absolutely nothing wrong and now some people they get over $200,000 with the student loan debt, a hundred thousand dollars with student loan debt.
You had better find yourself a spouse quickly, because when you have two people on the loan, that’s another thing, I’ve seen that works out well, when you have one person that has student loan debt and then their significant other does not have student loan debt, but you now have two incomes, you have stronger buying power, so what sucks is when both of you have extremely high student loan debt and then you have your incomes that do not mean that you cannot buy a house, your buying power is going to be as strong again.
Living in Illinois, you can get a nice home at 120 range, it’s difficult to find homes again, every situations will be a little bit different, but you want to most definitely make sure that you look at all of your options, you could always call without getting your credit ran, so we got a quick question here do you have problems with removing student loans? Because I’ve been able to remove them with the ease of federal and private.
It’s not about removing student loans, the problem should be people’s expectations, because two loans are off, your credit report does not mean you do that, you don’t owe them, I want to do another video on that again.
I say it one more time, because student loans are not on your credit report which does not mean that you do not owe them, you still owe them, don’t pay them and see what happens and I’ve also seen it where sometimes people get on their credit reports and didn’t know people are able to get them off.
It’s not about getting things removed, because everyone doesn’t hire us to try to get things removed, everyone doesn’t go into credit repair, everyone doesn’t go into those types of things, so it’s not about trying to get items removed, you know which was a shameless plug, but no problem at the same time, it’s more, so about everyone’s having their expectations, the thing about it is that there’s a lot of bad advice on Google and on YouTube.
When I’m finding exam, that’s giving the same advice, they don’t own homes so if your goal is homeownership, talk about the people that own homes, if they don’t own a home, they can’t give you advice on doing that, so it doesn’t minute that.
Things are not going in their life, anything like that, it’s the same thing without a new car, if they’ve never bought a brand-new car, before they can’t give you advice on how to buy a brand-new car, if they’d ever been a landlord before they cannot give you advice on being a landlord, so this is your financial life, it’s fine to ask questions, you can ask questions before getting your credit, it’s going to count against your debt-to-income.
You can only be sitting there, trying to get things removed or whatever, because if it pops up, you look crazy now with them, because it’s not like an auto loan, when you get your credit ran and then you buy the car, you leave the same day, that’s not how home buying works, you have underwriters, underwriters give things time, they want to make sure you have to find the house.
So you get your credit Randy, you find the house, then you close that takes 45 to 60 days that entire process, you had better believe they’re waiting for something to change on your credit report, I’m talking about removing them and there’s no payment, not a credit to deletion and there is not a repayment, I’ve never heard of that before, you’re more than welcome to promote whatever you want to promote.
At the same time, I’ve helped people buy homes and they’ve never had issues before setting the right expectations, I would hate for someone to hear me say something about that, I have yet to find a lender that has not that, it’s not another way to try to keep that from happening.
So you can do whatever you want to do. I’m letting you know another question, should I pay down my student loans as much as possible? I apply for a home loan not necessarily, I try to get the loan first, they’re not that crazy about it.
So for example, if you have your income with 60,000 and your student loans are 60,000, you’re probably going to have buying power around 130 140, so it’s horrible, so if I could give you a number, what I always tell you to do is to add your income up and then add your student loans up, that’s normally what your buying power was going to be.
Maybe you plus or minus, I’m sorry about it, it is maybe twenty or thirty thousand, that’s what I’m starting to see an Illinois a lot, so everyone’s situation is going to be different, but I’m telling you everyone that has student loans, I’m telling you it will count against your student.
I’m sorry for your debt-to-income, that does not mean that you cannot buy it, but you can always use that money for down payment, but I would go to a Linda first and see, but remember though don’t forget to watch the video I made before, that are the first time homebuyer checklist for 2018, you want to go, you want to get your FICO score first, get your FICO score first.
I know there are a lot of different programs out here where people are trying to say that you don’t have to pay your student loans, here’s the deal about how you’re going to do that on this video, I promise you I’m not, I don’t want to hurt people’s feelings, because I’m not that kind of person.
All I know is that these schools get money from students and I’m for the government and then the student are supposed to pay it back, but the students don’t pay it back, our promise shoot is going to be some issues later down the line.
Otherwise, there will be somebody promoting these types of programs whatever the case may be, I’m not knocking the programs, I’m saying I’ve yet to see a homeowner do it successfully, because all of my clients are buying homes, they’re having no issues at all, thank you so much, share this video, we got a lot of more videos coming up on the way, so be sure to subscribe as well, thank you so much.