Student Loans: #1 Challenge To Homeownership
Home prices continue to rise in Honolulu. It’s not uncommon for most first-time homebuyers to feel the squeeze. According to data released by National Association of Realtors, 49% of prospective homebuyers feel their student loans are preventing them from buying a home.
Student loan debt is no joke. According to Make Lemonade, a personal finance website, there are 44 million who owe $1.5 trillion in student loans as of 2018. As a Realtor, I’m constantly working with millennial first-time homebuyers who have student loans.
Good news. Having student loans might not prevent you from living the American Dream. Here are few things you can do to help you achieve homeownership…
Invest In Yourself
Every time you get paid, a percentage of your paycheck should go to a separate account. This is one of the most basic rules of personal finance. The irony is most people have difficulties in following this rule. By setting money aside, you are investing in your future. Just remember, "slow and steady wins the race." Unless you win the lottery, it takes time to build your wealth.
Build Your Credit
When you get prequalified by a mortgage lender, your credit will be pulled. Having a low credit score might prevent you from getting a mortgage. To prevent this, it’s important you understand what factors contribute to your credit score.
Pay Down Your Debt
It’s that simple – just pay down your debt. Like saving routinely, it’s important you don’t miss a credit card payment, student loan payment, car loan, etc. By paying down your debt, you might increase your credit score. If you have a lot of outstanding debt, you should speak with a financial advisor to see what strategy is best for you.