High student loan debt keeping recent grads out of housing marketPosted: Updated:
GILBERT, Ariz.-- Many young adults are finding that they can't afford to buy a home because of student loan debt.
The high cost of education is keeping them out of the housing market.
Daniel Dastrup said he never imagined his student debt would keep him from being able to buy a home, especially since he has a good job and said he can afford mortgage payments.
Dastrup is a recent college graduate now working as a dentist.
"I am 29 years old and just got out of school, so I've been in school my whole life," said Dastrup.
As a result, he has racked up quite a bit in student loans.
"I am closer to $300,000," said Dastrup.
He never thought that would mean he and his wife couldn't qualify for a loan to buy a home.
"We found a home we were really excited about and started the pre-qualification process, and immediately they came back and were like, 'Sorry you don't qualify.' You go through all that school and work so hard and think that once you get out of it, it will be worth it, and come to find out you can't even qualify for a loan to buy a home," said Dastrup.
He was told one of the main issues was his income-to-debt ratio.
Right now, Dastrup is paying three thousand dollars a month on his loans.
"The payment amount is really the biggest difficulty," Bill Rabold, mortgage consultant.
Rabold said there is a solution to that.
"Most student loans will offer an income-based repayment plan," said Rabold.
That increases the chances of getting approved for a loan to buy a home.
Dastrup said he will be trying that first, and then he will submit his tax returns and his average income amount to lenders to see if that works.
Dastrup said he is getting paid per procedure.
He said that's an another issue when trying to get a loan, so he said he hopes presenting his tax returns will help.
If affording the down payment is an issue, there are actually several programs for first-time home buyers that can help them afford a down payment.
Click here for that information: