College debt is a huge topic that is not spoken about as much as it should be. Each year, thousands of students graduate from college with a degree, but they get stuck with a huge student loan debt. This debt takes years to pay off and can often affect a person's ability to purchase a home. In Central Florida, we see this problem all the time with graduates from schools like the University of Central Florida.
Last year, we hit an all-time low for first-time home buyers mainly because they could not qualify for a loan. When talking to a lender about getting qualified to purchase a home, the lenders have to account for the college debt in their debt-to-income ratio. This stops many people from qualifying for a home loan and is a huge problem for first-time home buyers. As a result of not getting qualified to purchase a home, people often end up renting for longer periods of time or staying with family.
The good news is that companies, such as Fannie Mae, have an option for the first-time home buyer! If someone is paying off the college debt for the loan applicant (like their parents), the lender does not have to account for the college debt. As long as the proper documentation is presented to show that the debt is being paid off by a third party consistently, the lender will not include it in the debt to income ratio. This gives the applicant a higher chance of getting approved to purchase that new home and is great news for any Central Florida graduate!
As always, we are here to help you! Please feel free to Contact Us, and I hope that I have helped you get real estate smart.
The Miller Realty Group is a successful real estate team who provides real estate solutions for residential homeowners in the metro Orlando real estate market, including Lake Mary, Longwood, Heathrow, Sanford, Winter Park, Winter Springs, Altamonte Springs, Maitland, and surrounding cities. Founded in 2006, The Miller Realty Group has transformed themselves into one of the top real estate teams in Central Florida.
