student loans and bad credit?
how can my sister buy a house with student loans and not so good credit. she and her husband both work. can she get a mortgage loan? she hasn't even tried cuz she thinks she can't get one.
Public Comments
- student loans shouldn't actually count towards outstanding debt and therefore not come in the way of mortgage borrowing. however, it's the other debts that go along with being a student that are the problem, credit cards, overdrafts, loans and phone bills etc... these will count against her. get them to go and speak to a mortgage adviser for free at a bank / estate agents. hope that helps.
- You never know until you try! If she has no outstanding "bad" loans and she's been paying off her student loans in a timely fashion, she might not have as much trouble as one would think. She should check out a couple lending institutions and try to get pre-approved for a certain amount of loan before starting to look at houses... that's the only way she'll know for sure.
- Depends what "not so good means." If they both have over a 580 and a decent recent credit history they may be able to get a FHA loan. It also depends on income and amount of debt. They need a total debt ratio under 41% for FHA. This means all liabilties on the credit reports plus the new mortgage, insurance and taxes per month can be no more than 41% of their gross income. If both the debt ratio is low enough and credit is at least a 580 they have a shot.
- She needs to see a lender to get a prequalification assessment.
- Your sister and her husband need to talk with a mortgage broker. If they can not get pre-approved the loan officer will let them know what they need to do to get on track.
* Some answers may have been provided by Yahoo! Answers.