Yes. You can buy a house in Denver with student loans.
What matters isn't necessarily how much you owe. It's the monthly student loan payment a lender must count and how it affects your mortgage qualification.
Before student debt makes you put homeownership on hold, here's what you need to know.
How Do Student Loans Affect Mortgage Qualification?
Mortgage lenders look at your monthly debts compared with your qualifying monthly income. This is your debt-to-income ratio (DTI).
Your student loan balance itself isn't plugged directly into that calculation. The qualifying monthly payment is what can affect your DTI and potentially your buying power.
That's why two people with the same student loan balance can qualify very differently.
What If My Student Loan Payment Is $0?
This is where many buyers get surprised.
A $0 student loan payment does not necessarily mean a mortgage lender will count $0 when qualifying you.
How the payment is calculated can depend on your mortgage program, repayment status, available documentation and current lending guidelines.
This is especially important if your student loans are deferred, in forbearance, reporting a $0 payment or on an income driven repayment plan.
Don't assume a $0 payment means the debt won't affect your mortgage qualification.
Do FHA and Conventional Loans Treat Student Loans Differently?
They can.
FHA and conventional mortgages have different underwriting guidelines, including how certain student loan situations are handled.
Rather than assuming one program is automatically better, compare the entire financing picture.
Monthly payment. Cash needed to close. Mortgage insurance. Credit. DTI. Loan structure. Long term cost.
The best mortgage isn't simply the one that gets you approved. It should also make sense for your financial situation.
How Much Can Student Loans Affect Your Denver Buying Power?
Imagine two Denver buyers with the same income.
One has very little monthly debt. The other has a car payment, credit card minimums and a student loan obligation.
Even with identical incomes, they may qualify for different housing payments.
That's why I prefer to start with:
"What monthly housing payment actually works for my budget?"
Then we can determine what purchase price and financing structure may support it.
If you're trying to figure out your broader buying budget, read I Make $100,000 a Year: How Much House Can I Afford in Denver?.
Should You Pay Off Student Loans Before Buying?
Not automatically.
Using a large portion of your savings to pay down student loans may reduce your monthly debt. But it could also leave you with less money for your down payment, closing costs, reserves and expenses after closing.
Sometimes paying down debt can improve mortgage qualification.
Other times, keeping the cash may put you in a stronger overall position.
Run the numbers before moving the money.
If cash is your bigger concern, read Can $10K in Savings Be Enough to Buy a Denver Home?.
And if you're worried you don't have enough for a down payment, read Can You Buy a House in Denver With 3% or 5% Down?.
What If You're Worried About Your Credit Too?
Having student loans does not automatically mean your credit isn't mortgage ready.
Your payment history, balances, account history and overall credit profile matter.
If credit is part of what's making you hesitate, start with What Credit Score Do You Need to Buy a House in Denver?.
Don't wait because you think you probably won't qualify. Find out what the numbers actually say.
What Should You Do Before House Hunting?
If you have student loans, don't start by paying off debt or moving money around.
Start by having your actual numbers reviewed.
Your income, monthly debts, student loan payment, credit, available savings and target housing payment should be evaluated together.
You may discover your student loans barely change your buying strategy.
You may find one particular debt is limiting your buying power.
Or you may decide waiting makes sense and leave with a specific plan for what needs to change.
Any of those answers is better than guessing.
The Bottom Line
Student loans don't automatically disqualify you from buying a home in Denver.
What matters is how the student loan obligation used for qualifying fits into your overall financial picture.
Before you drain your savings trying to eliminate student debt, run the mortgage numbers both ways.
The right strategy may not be paying everything off first.
It may be finding the combination of cash, debt and financing that puts you in the strongest position to buy.
Frequently Asked Questions
Can I get a mortgage if I have student loans?
Yes. Student loan debt by itself does not automatically prevent you from qualifying for a mortgage.
Does a $0 student loan payment count as $0 for a mortgage?
Not necessarily. The payment used for mortgage qualification depends on the mortgage program, documentation and current guidelines.
Do student loans affect how much house I can afford?
They can. The student loan obligation used for qualifying may affect your DTI and therefore your potential housing payment.
Should I pay off my student loans before applying for a mortgage?
Not automatically. Paying down debt can help in some situations, but using your savings to do it may reduce the cash available for your home purchase. Compare both scenarios first.
About Jennifer Chicano | Your Loan Chic
Jennifer Chicano is a Mortgage Broker and Certified Mortgage Advisor™ serving homebuyers throughout the Denver metro area and across Colorado, Arizona, California, Pennsylvania and Florida. She helps buyers understand their financing options and make confident mortgage decisions.
NMLS #1194079
Are Student Loans Making You Wait?
Don't rule yourself out based solely on the balance on your student loan statement.
Have the numbers reviewed first. You may have more options than you think.
Are student loans one of the reasons you've been waiting to find out whether you can buy a home?