Four ways to be a better loan applicant

Do you think student-loan debt is preventing you from buying a house? A recent survey by the National Association of Realtors supports that opinion.

The survey found that 71 percent of non-homeowners who were current in their student-loan repayment believe their debt is holding them back from purchasing a home. The results also revealed that student debt postponed four in 10 borrowers from moving out of a family member’s household after graduating college.

However, your loan application doesn’t get approved or rejected by survey results. It’s approved by a lender who considers your individual financial situation.

The lender wants to know that you can handle the mortgage payment. Because the ratio of your debt to your income is so important to your loan application, the higher your income and the lower your debts, the better your chances of getting your loan application approved.

Keep in mind that more than your student loans go into your debt-to-income ratio; car loans, credit card payments all count too.

Here are four ways to be a better loan applicant:

• Have a plan to pay off debt and build your savings, and make progress each month toward your goals.
• Consider consolidating high-rate credit card debt into a lower-rate loan or card.
• Work to spend less on entertainment, vacations and other non-essential expenses.
• Avoid new debt.