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Shopping for a mortgage with substantial student loan debt may seem like an exercise in futility, but it might be less of a challenge than you imagined. Between repayment plans, lender approaches and old-fashioned financial responsibility, buying a home may already be within reach.  Before writing off your ability to qualify for a mortgage, review these five ways to close the gap that could be keeping you from homeownership. 
  • Income-Driven Repayment
If federally backed student loans make up the majority of your debt, be sure you understand your payment options. You likely qualify for a repayment plan that uses your current income to determine your monthly payment. Rather than calculating repayment based on paying the loan off by a specific date, these plans limit the amount due to a certain percentage of your income. Taking advantage can often improve your debt-to-income ratio, a significant factor taken into account by lenders. 
  • Mortgage Options
One of the best ways to raise the chances of finding a mortgage, despite student loan debt, is by working with a lender committed to finding the best loan option for you. While an income-based repayment plan can help, some mortgages may still consider the loan’s entire balance. An experienced originator, like those with Open Mortgage, will understand the requirements of each loan and help you find the best fit. They can also explain how low down payment or industry-specific programs may be able to meet your needs. 
  • Forgiveness
In addition to choosing an appropriate repayment plan, borrowers with federal student loans should make sure they understand their forgiveness options. Those who work for a non-profit entity for ten years, and make their required payments during that time, could be eligible for forgiveness of the remaining balance. Other plans may offer forgiveness in 25 years regardless of employer. Forgiveness and cancellation programs also exist in certain fields, such as healthcare or education, or particular states or regions, so be sure you’re not missing out on a big incentive. 
  • Refinancing
If you aren’t missing out on any repayment plans or forgiveness programs, or have private loans with less flexibility, don’t give up yet. Current interest rates are near record lows, and that could mean a lower payment is still attainable. Refinancing your student loans with a lower rate or longer term could also bring your debt-to-income ratio to a level that makes you eligible for a home loan. Again, speaking with a lender can clarify how close you are to approval and provide a plan for moving forward. 
  • Patience
At worst, you may have to rely on a little patience. If none of the options for making an immediate change to your situation pan out, there is still work to be done. Begin by paying your monthly payment on time every month. A missed or late payment will only make it harder to get approved down the road. Consider adjusting your budget to prioritize paying down student debt beyond the minimum amount due. Eliminating balances with the largest monthly payment may provide a quicker path to a lower DTI, but crunch the numbers to be sure. If you’re serious about buying a home, you won’t regret building a plan and timeline to get you there.  Whether you’re ready to apply, or just exploring your options, start the conversation with an experienced lender by calling us today or going online to
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