As school starts back, many of us, including myself, are sending our children off to college. It’s a very exciting and emotional time, and a very expensive one. With Sterling’s impending departure to attend college this month, it got me thinking about student loans. They are a necessary evil for most to attend school.
While there are varying opinions regarding these loans, one thing is certain — they can derail your dream of buying your first house, your next house, your vacation house, etc., if your loan is handled by an inexperienced loan originator and/or a conservative lender.
Why is this?
A few years back, mortgage guidelines were changed to require lenders to count student loan payments against a buyer’s debt-to-income ratio, even though the loans were in deferment. Too many times, these days, prospective buyers are being told they cannot buy a home due to student loans. Many are told a week before closing, which is an entirely different issue within itself.
Therefore, choosing the right lender is important. As a consumer, you must interview prospective lenders. I see people who focus only on interest rates. While rates are important, all lenders are within .125 percent to .25 percent, which, in the long term, is not that much money.
What consumers should do is find out not only how long the mortgage originator has been in the business, but what their production is. There is proof in the numbers. Those who close many loans know what they are doing, and can prevent these issues from popping up a week before closing. We know how to navigate the student loan waters. The average loan officer in our industry closes 36-50 loans a year; that is the norm. I close more than 175 loans a year.
Student loans are an issue with obtaining a mortgage, but there are ways to work within the guidelines to help homebuyers with student loans to buy a home, whether they are in repayment or not. The key is you must work with someone who can guide you through the process and set you up for success.
By Jay White, contributing writer. He lives in Acworth with his wife and three sons. Jay was named to Mortgage Executive magazine’s list of Top 1 Percent Mortgage Originators in America. He was president of Acworth Business Association in 2014 and 2015.