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Can I Restructure My Student Loans to Buy a Home?

Convert to an Income-Driven Repayment Plan and save money.

Thinking about buying a home? Wondering how your student loans may affect your ability to purchase a home? You are not alone and there are answers to your questions and there may be options to restructure and reduce your student loans whether you are buying a home or just need relief from high monthly payments.

Many of our real estate clients have completed their education, obtained good jobs, started families and are ready to find the home of their dreams. Their first course of action involves working with a mortgage lender to determine their purchasing power. The lender has the initial discussion about income and expenses in order to calculate their debt to income ratio or DTI. Items such as credit cards, car payments and student loans are considered when calculating a borrower’s DTI. Anything that can be done to reduce expenses will improve the DTI and allow the borrower to spend more in the purchase price.

Recently, one of our buyers was told by her lender that she should consider applying for a government backed program to see if she could qualify as it would likely reduce her student loan payments and increase her DTI. The lender suggested she apply for the Pay as You Earn Program (PAYE).

Our buyer did qualify for the program and it saved her approximately $150 per month in student loan debt which was then applied back into her DTI, allowing her to qualify for the home that perfectly suited her and her family. One of the advantages of the program is that if our client makes payments on time for the next 20 years her remaining loan balance will be forgiven.

Our client is delighted to be in her new home. If you want to learn more about how you might be able to take advantage of this program, please visit this site:

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Helping our clients achieve their goals is what we do best. If you have any real estate related needs, whether buying or selling, give us a call and let us put our expertise to work for your – Experience Matters!

The Lang Group is a team of residential Realtors® serving the Phoenix Metro Area, affiliated with HomeSmart and part of the Elite Group of HomeSmart agents. Their specialties include buyer representation in New Home Sales, First-Time Buyers and Credit Challenged Buyers. The information contained herein is not intended to be financial advice. Please consult your tax advisor, CPA or a Mortgage Lender for further information. The Lang Group can be reached at 602.476.2044 or