Paying Off School Debt to Afford a Mortgage

by Tricia X. Cummins 02/17/2019

The cost to attend university continues to rise, putting pressure on students to afford an education. While some universities assist their students, many raise their prices to contend with operating costs. As a result, students leave school with mounds of debt that impede their quality of life. Paying off student loans starts by laying the appropriate groundwork, which gives you the best chance at success. 

Where to Start

Begin by identifying the type of student loans you have. Most often, you have either private or government student loans. The difference between them dictates the various options available to eliminate your debt. Now that you've identified your student loan type start with the government student loan. 

Government Loans

Government loans offer a variety of payment options based on factors such as your income and ability to pay. To more effectively make your student loan payments, request the payment plan that fits your financial situation. When you do receive extra money—like that birthday gift from Great-Aunt Daisy—apply it to your principal balance. You'll speed up the loan elimination process. By using the right payment plan, you balance your debt elimination with financial well being.

Private Loans

The payment plans for private student loans are difficult to adjust. One method to consider is refinancing to a lower interest rate. By refinancing your loan, you may lower your monthly payments. If you continue making more substantial payments on your refinanced note, you'll eliminate the principal balance at a faster rate. 

If you find yourself looking to refinance, shop around. Several companies specialize in student loan refinancing. By lowering your interest rate, you save money and can use that extra money toward principal payments, ultimately eliminating your student loans faster.

Finally, once you set a repayment plan, increase your principal payments through a second job or side-gig. Lyft, eBay, Instacart, and other flexible part-time options make increasing your outside income possible. Eliminating student loan debt is difficult, but certainly possible. With minor tweaks and adjustments, you will find the right path for you. 

Once you clear your student debt, you will have extra income for items such as saving for a down payment on a home. Purchasing a home is arguably the most significant asset for most people. By eliminating student debt, you can focus on home buying. To see if you qualify for a mortgage despite your school debt, reach out to a mortgage broker or loan officer.

About the Author
Author

Tricia X. Cummins

Let your search for a real estate professional end here. I am qualified and ready to assist you with any of your real estate needs. With my lending background, plus over 12 years of Real Estate experience, my approach is customized for each client; our solutions for you are never one-size-fits-all! Please view this website as an introduction of my services and capabilities in this local area. Give me a call or send an email when you are ready to visit some homes or to schedule a free home selling consultation. I look forward to working with you!