Student Loan Changes Are Coming—Here’s What Homebuyers Need to Know
Change is coming
At Ross Mortgage, we understand how student loans can shape your financial journey—and for many, that includes the path to homeownership. With new updates from the federal government regarding student loan legislation, now is the time to understand how these changes could affect your ability to buy a home.
What’s Changing?
The federal government has announced that it will begin collecting on defaulted student loans again. For borrowers who have been in default, this means things like wage garnishment or tax refund withholding could resume. This move follows years of paused payments and protections that are now coming to an end.
What This Could Mean for Your Mortgage Journey
If you have student loans—especially if they’re in default—this policy change may impact your ability to qualify for a home loan. Here’s how:
1. Your Debt-to-Income Ratio Matters
When you apply for a mortgage, lenders look at how much debt you’re carrying compared to your income. If student loan payments resume or increase, it could raise your debt-to-income ratio and reduce how much you qualify for.
2. Credit Score Concerns
If your student loans are in default or collections restart, your credit score could take a hit. Since your credit score plays a key role in the loan approval process and your interest rate, this could affect the terms of your mortgage.
3. Saving for a Down Payment
Monthly student loan payments may also make it harder to set aside money for a down payment or closing costs, which can delay your homeownership plans.
What Can You Do?
The good news? There are steps you can take now to stay on track:
- Get Current on Your Student Loans: If you’re behind, reach out to your loan servicer about ways to get caught up. Restoring your loans to good standing can help improve your credit profile.
- Review Your Budget: Adjusting your finances to account for resumed student loan payments can help you continue saving for your home.
- Work with a Mortgage Professional: At Ross Mortgage, we’ll look at the full picture of your financial situation and help you explore mortgage options that make sense—even if you have student loan debt.
You’re Not Alone—Ross Mortgage Is Here to Help
If you have questions about your student loans or would like to discuss how they may impact your path to homeownership, we’re here to help. Contact us today, and an experienced Ross Mortgage loan officer will be in touch to provide the resources and guidance you need.
