Despite popular belief, you don’t need to choose between paying off student loans and buying a house. Tons of first-time buyer schemes will help you get on the property ladder. So, if you can save enough, you may even be able to pay back your student debt as well. However, you’ll need to consider your options carefully before committing to anything.
The cost of the down payment
Finding the money for the down payment is often the hardest part of buying property. However, with the help of one of the many first-time home buyer programs out there, you can enjoy a reduced price on your deposit.
Hit the internet and see what options you have available to you. You may not have to part with tens of thousands of dollars to buy a home while you’re still indebted by student loans.
In addition to your downpayment you’ll have to consider all the following costs in addition to your student debts:
- Closing costs: these typically range between 2% and 5% of the value of your home.
- Home maintenance: prepare to save 2% of the cost of your home each year to spend on general repairs and furnishings.
- Factor in any other emergency costs like medical bills and the fees associated with running a car.
Top Tip: Use a closing costs calculator to get a better idea of how much to put aside to cover this expense.
Refinance your student loans
Refinancing your student debt can have a few benefits. For example, you might get access to lower interest rates. To be eligible for refinancing you need a credit score in the high 600s, a reliable income, and a proven track record of paying off your debts in a timely fashion.
Refinancing can sometimes elongate the length it takes to pay off your student loan, so read the fine print before doing anything.