If you want to become a homeowner, we can make it happen. What might feel like a roadblock today may just be a small detour instead of a dead end. That’s why I created my 5-week series. The 5 Most Common Home-Buying Myths Busted. Stay tuned each week as we bust 5 myths that might be holding you back. This week’s myth to be busted is about Student Debt. A lot of what people believe about buying with student loan debt simply isn’t true.

Myth: I can’t buy a home because I have too much student loan debt.
Truth: You can! And there are even loan programs designed specifically for buyers like you, including those with advanced degrees and sizable student loans. Let’s walk through how it works.

You’re Not Alone

Student loan debt is a common concern among first-time buyers, especially here in Seattle where living expenses run high and career paths often start sloooow. If you’re paying $200 to $300 each month toward student loans, yes, that will affect your monthly budget, but it doesn’t mean homeownership is out of reach.

There are financing options, lender flexibility, and assistance programs that can work in your favor. You don’t need to pay off all your loans before you buy. In fact, with the right strategy, you might be able to buy sooner than you expected.

Always talk to your financial advisor before making any big decisions, but know this: student loans do not automatically disqualify you from owning a home.

What Lenders Actually Look At

Lenders care about something called your debt-to-income ratio or DTI. This is how your total monthly debt compares to your gross monthly income. It matters more than your credit score and sometimes even more than your down payment.

That means your student loans, car payments, and credit card balances are all added up to determine how much additional debt (like a mortgage) you can manage.

Lenders generally like to see a DTI below 36 percent, with some flexibility depending on the loan program. Some buyers can qualify with a DTI closer to 43 percent or more if they have strong compensating factors. Still, just because you qualify doesn’t mean you should spend at the top of your range. Focus on what feels financially safe for you.

Understanding the 28/36 Rule

This is the rule of thumb most lenders use:

• 28 percent of your gross monthly income can go toward housing expenses (mortgage, property taxes, insurance, and any mortgage insurance)
• 36 percent is the total cap when you add all recurring debt, including student loans and credit cards

This rule doesn’t reflect your credit score or how reliably you pay each month. It’s purely a measure of debt load compared to income. That’s why it can be frustrating for well-qualified buyers with strong payment histories but high student loan balances.

How to Lower Your DTI

Start by reviewing your student loan terms. You may be able to:

• Switch to a graduated repayment plan that starts lower and increases over time
• Consolidate your loans for a lower monthly payment
• Extend your repayment period to reduce your monthly obligation (though this can increase your long-term interest costs)

You can also boost your overall financial picture by:

• Picking up additional income through freelance or part-time work
• Delaying a vehicle purchase or relying on Seattle’s transit to avoid car payments
• Contacting your credit card companies to explore lowering minimum payments

Every bit helps, and the goal is to show lenders that your monthly obligations are manageable.

Choose the Right Lender

Not every lender evaluates student debt the same way. Some calculate your DTI using the full balance of your student loans, while others consider your actual monthly payment. That difference can make or break your approval.

Look for lenders who understand first-time buyer challenges and work with Washington state’s assistance programs. Some lenders even specialize in working with professionals who carry high educational debt but strong earning potential.

Federal Loan Program Highlights

Here are a few options that can help you buy a home even with student loan debt:

• Fannie Mae HomeReady: Allows up to 50 percent DTI with as little as 3 percent down
• VA Loan Guaranty: For those with military service, offers flexibility up to 41 percent DTI or more if part of your income is tax-exempt
• FHA Loan: Often allows up to 43 percent DTI, sometimes higher depending on credit and other factors

Check current guidelines or contact me for updates, especially as lending limits and policies are updated regularly.

Are You Ready?

Buying a home is a big decision, especially with student loans in the mix. Ask yourself a few honest questions:

• Do you have a steady income and a growing career path?
• Are you planning to stay in the Seattle area for at least 5 years?
• Have you been managing your debt well and started saving?

If you answer yes to most of these, you may be ready to move forward. It might mean adjusting expectations for your first home—maybe starting with a townhome instead of a single-family house or looking in a different neighborhood—but it’s absolutely possible.

Your first home doesn’t have to be your forever home. Focus on getting your foot in the door and building from there.

Let’s Make a Plan

You invested in your education. You worked hard to start your career. Becoming a homeowner takes that same patience and persistence. If you’re ready to explore what’s next, I’m here to help.

Grab a time for us to meet. We’ll walk through where you are financially, talk about timing, and create a plan that works for you; even with student loans in the picture we’ll get you the home you’ve been looking for.