Achieve Homeownership, Even with Student Loan Debt
If you have student loan debt, you may be wondering how this affects your ability to buy a home. Good news – even if you have student loan debt, you can still achieve your homeownership goals.
Your credit score is an important factor when it comes to purchasing a home. To maintain a good credit score, always make timely payments – including student loan payments!
How student loan debt can negatively impact your credit score, especially if you don’t make payments on time:
1. The first day after you miss a student loan payment, your loan becomes delinquent. If you are delinquent for more than 90 days, your loan servicer will report it to the three major credit bureaus.
2. When you default, this can negatively affect your credit rating and future borrowing ability. You may contact your student loan servicer for more information about repayment options to fit your current needs.
Tip: You can get ahead on your student loans and reduce the interest you pay and the total cost over time by making payments before they are due or paying more than the amount due each month.
Learn more about establishing or maintaining a good credit score to help you along your journey to homeownership.
Contact me today and determine the right mortgage for you!
Andrew Evans
864.313.0602
or by email at andrew.evans@homestarfc.com
Our HomeStar Financial Corporation blog post is here.
HomeStar Financial Corporation
9 Caledon Court Suite C
Greenville SC 29615
NMLS #251611
Branch NMLS #1895564
GA #63071
FL #LO55182
NC #I-186396
SC #MLO-251611
Use Your Tax Refund & Stimulus Money to Fund Your New Home
You can walk into your dream home sooner than you think!
Although this past year brought us uncertainty, achieving your homeownership goals is still possible. Support your homeownership goals by doing the following:
- Using your tax refund to help with any expenses
- Paying down debt
- Contributing to a down payment
- Paying for closing costs
- Completing large purchases, such as furniture, appliances, and more
- Covering costs for a home inspection and appraisal
- Saving for home improvements
- Making an extra mortgage payment
- Creating immediate growth in your wealth
- By using unexpected funds, such as stimulus payment(s), toward purchasing or refinancing your home, as they are not taxed
- Taking advantage of historically low mortgage rates
- Saving you more money
Make this your year to own a home! Contact me today at 864.313.0602 or by email at andrew.evans@homestarfc.com
Our HomeStar Financial Corporation blog post is here.
HomeStar Financial Corporation
9 Caledon Court Suite C Greenville SC 29615
NMLS #251611
Branch NMLS #1895564
GA #63071
FL #LO55182
NC #I-186396
SC #MLO-251611
Tips for maintaining credit
1. Keep track of spending. Always keep track of checks written, debit and credit card transactions, and ATM card usage. Review your monthly statements for discrepancies and report any errors.
2. Pay bills on time. This applies to all bills, even those that aren't reported to credit bureaus. This is because they can end up on your credit report if you fall behind.
3. Keep balances low on credit cards. Combined credit card balances should be within 30 percent of your combined credit limits.
4. Don't close unused or old credit cards. Closing a credit card stops updates sent to the credit bureaus by credit card issuers. Closing a credit card also reduces available credit, especially since your goal is to keep your balances less than 30 percent of your available credit.
5. Don't exceed your credit limit. Available credit is how much credit you have remaining on your line of credit or on your credit card - the credit limit minus the outstanding balance.
6. Build credit without a credit card. You can maintain credit by paying items off diligently.
7. Limit applications for new credit. Don't submit too many applications, as multiple credit inquiries can have a negative impact on your credit score.
8. Watch your credit report. Keeping an eye on your credit report will help you monitor any changes, find errors, reveal identity theft, uncover credit card fraud, and more.
tips for establishing credit
Additional Information
As you’re thinking about purchasing a home, you will need to consider the important role your credit score will play in your ability to secure a mortgage loan. If you have little to no credit currently, the tips below can help you get started and on your way down the path to home ownership.
1. Open a checking or savings account. Lenders typically request bank account numbers on credit applications. Open a bank account and keep it in good standing to show lenders that you can responsibly manage your money.
2. Apply for an entry-level credit card. Entry-level credit cards do not require a long credit history for approval. There are various types to consider, including secured credit cards, student credit cards, and store credit cards.
- Secured credit cards require a cash deposit, which works as collateral if a payment is missed.
- Student credit cards give younger cardholders a way to build credit from scratch.
- Store credit cards help to save money, especially if the store is frequented often—giving those with little to no credit the opportunity to prove they can handle their money correctly.
3. Get a co-signer for a credit card or loan. As you know, applying and obtaining a credit card or loan can help you establish good credit as long as you pay on time and do not miss payments. A co-signer with good credit can help you qualify or acquire better credit terms. If you choose this route, the co-signer will take responsibility for payments. Therefore, the credit history will be reflected on both of your reports.
Establishing credit is crucial to your everyday life as it makes it easier for you to purchase items—along with saving you money in the process. Specifically, qualifying to make big purchases like buying a home are determined by your credit score. Each of these tips, along with the responsible use of credit, can help you build your credit over time.
Reach out to me with any questions or to learn more! Contact me today at 864.313.0602 or by email at andrew.evans@homestarfc.com
Our HomeStar Financial Corporation blog post is here.
HomeStar Financial Corporation
9 Caledon Court Suite C
Greenville SC 29615
NMLS #251611
Branch NMLS #1895564
GA #63071
FL #LO55182
NC #I-186396
SC #MLO-251611