Can You Still Buy a Home If You Have Student Loan Debt? Here Is What You Need to Know
Many potential homebuyers with student loan debt are wondering if homeownership is even possible for them. We’ll show you how.
Millennials, or those born between the years 1980 to 1998, have long dominated the consumer market. As such, this generational group should have also taken over the real estate market. But millennials continue to fall short of the classic American dream of being a homebuyer.
Why might that be? Well, hello there, student loan debt.
Owning a home has always been an expensive endeavor, yet coming-of-age homebuyers already face financial burdens from their college days. Millennials have on average $42,637 in student loan debt while Gen-Zers have $24,473, as the Education Data Initiative reports in its 2024 study.
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Looking to purchase a home in the near future, despite having student loan debt? Yes, it’s possible! Use our Home Affordability Calculator to get an idea of how much you can afford to spend on your dream home.
Even in the face of that stat, we have good news to share. Student loan debt doesn’t make it impossible to live out your dream of homeownership; it just makes it a bit more difficult because of its impact on your debt-to-income ratio (DTI), credit score, and down payment savings. If you’re considering buying a home with student loan debt, here are the most important things you need to know directly from expert real estate agents and mortgage professionals.
You build zero equity while you’re renting, and your payments are variable. Owning a home increases your equity and creates financial comfort in the long run.
Edward Kaminsky
Real Estate Agent
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Edward Kaminsky
Real Estate Agent at The Kaminsky Real Estate GroupCurrently accepting new clients
- Years of Experience
38- Transactions
1469- Average Price Point
$2m- Single Family Homes
972
The possibility of homeownership with student debt
Are you someone who desires to settle down in a home of your own soon? You certainly aren’t alone — 75% of Americans see homeownership as a part of the American dream. It’s a dream that pays. As Edward Kaminsky, a real estate agent with over 38 years of experience in Manhattan Beach, California, shares, “You build zero equity while you’re renting, and your payments are variable. Owning a home increases your equity and creates financial comfort in the long run.”
This may seem impossible if you’re one of the 42.8 million borrowers in the U.S. with student loans and are worried about how that may impact your ability to buy a home. The short answer is that student loan debt doesn’t disqualify you from this undertaking!
The longer answer is that it could affect your chances of obtaining an affordable mortgage.
You may be ready to go house hunting ASAP, but you must first identify where you stand with your student loans. The best place to start? Take it from Richie Helali, a mortgage specialist from HomeLight, who shares, “My general recommendation is to talk to a lender first. There’s nothing to be embarrassed about as everyone’s financial scenario is different. The loan officer’s job is to help you solve your unique situation and be in a better position to buy.”
