Can you get a mortgage with student loans?
We know everyone’s circumstances are different, that’s why we work with mortgage brokers who are experts in all different mortgage subjects.
As student debt continues to increase due to spikes in university fees, there’s no doubt that student loans and mortgages are currently and will continue to affect millions.
With this in mind, we’ve come up with a comprehensive guide that will help you get the best out of your student loan mortgage options.
How does a student loan affect a mortgage application?
Customers often ask us will a student loan affect my chances of getting a mortgage? and does having a student loan affect mortgages? and as we explained earlier, while student loans debt is not viewed in the same way as other types of borrowing, the majority of lenders will still ask you about it when applying.
- How much your repayment is each month and changes your income
- How much you have left to repay
Looking at how much your repayment is each month while considering student loans and mortgage qualification comes into play because student loans are deducted automatically from PAYE salaried workers.
On payslips, it will be shown in the same way as National Insurance Contributions and other taxes, which are predetermined according to your pay. What you are left with afterwards would be your net pay and in turn, what can be considered by lenders as a part of the money you have available to pay off your mortgage.
Essentially, in the eyes of most lenders like all other expenses accounted when trying to get a mortgage student loan debt could affect what you are able to afford.
Your mortgage debt to income ratio with student loans is not the only key thing you should be mindful of though. How much you have left to repay on your student loan is also considered because it’s still noted as a form of outstanding debt despite it not changing your credit history. With these points acknowledged, it’s risky to disregard student loan impact on mortgages.
However, don’t let that be too much of a concern or put you off, as there is help at hand and you’re in the right place. No need to hesitate in making an enquiry as our mission is to get all who do the right assistance from expert brokers.
Applying for a mortgage with student loan debt: Do you have to declare it on an application?
The first thing we need to address about student loan mortgage applications is the issue of whether it makes sense to declare it.
Going back to what’s been said about lenders looking into your income and outgoings as a standard means of checking affordability, for those who are PAYE workers especially there is no escaping declaring your repayment contributions.
For instance, nearly all lenders look at your payslips as a part of this process and the repayments are stated on them. For those who are self-employed, you won’t show them on your invoices but it’s legally expected if over a certain threshold of income for you to declare and make repayments.
When you are requested to show your accounts to lenders, this will appear as one of your expenses too, and so will be taken into consideration.
The best way to get all of your questions answered is to reach out and get in touch, that way you can be assured of the options available to you.
Should I pay off my student loan or my mortgage first?
As we all hope to live debt-free, many often are faced with choices on which are the most important debts to clear first. If you’re one of the many people asking should I pay off my student loan or my mortgage first? You should weigh up the implications of both.
The downside of delaying paying off your mortgage as early as possible is that you will end up paying more interest in the long run. If you have the means to pay off your mortgage early but choose not to, this could mean missing out on great benefits such as having an asset/investment in property and other things like profit from rent or selling if you decide to go down that avenue.
Looking at the downside of not paying off student loans, we must recall what we mentioned about how this type of borrowing is viewed differently and usually involves lower interest rates, longer repayment times/allowances and doesn’t affect credit.
However, if you took out a loan from a bank for postgraduate studies for example, these types of loans are different to standard student loans and their terms and conditions determined by the lender. In these instances flexibility may be limited and paying off your loan may be a priority depending on your circumstances.