How to buy a home with student loan debt.

Balancing student loans and a mortgage.

If you’re wondering if your student loans might affect your chances of buying a house, you're not alone. But just because you're paying down student loans doesn’t mean saving for a down payment is impossible. With some financial preparation, you can still achieve this life milestone: 

• Figure out how much home you can afford.  
  While you may have a sense of the home you want, it will help if you decide on size, location, and amenities. To make homeownership feasible, figure out how much of a mortgage you can afford, the duration of the mortgage loan, and whether the interest rate will be fixed or variable. 
• Adjust your budget.  
  To save for a down payment and the fees and costs associated with buying a home, look for ways to reduce your spending. Can you cut back on major categories, such as rent, food, transportation, and entertainment? Don't leave any costs unturned; every little bit you can save helps. Your savings plan should include checkpoints to monitor your progress and inspire you to keep going.

• Minimize your student loan debt.  
  Look into ways to help make your student loans more manageable. Options include consolidating your student loans or refinancing them at a lower interest rate. That could help you lower your monthly payments and reduce the overall cost of the loans.
  
  Besides looking into options to lower your student loan payments, you can try to knock out other debt, such as credit card debt and car payments. Depending on your individual economic situation, you may want to consider making higher monthly payments or explore transferring a credit card balance to another card with a zero percent annual percentage rate (APR). 
• Consider life insurance.  
  If you're concerned about taking on a large financial responsibility, such as a mortgage, a life insurance policy can help protect your loved ones. Should you pass away, they can use the life insurance to make mortgage payments—or even to retire the mortgage. Life insurance can also be used to pay off outstanding balances or taxes associated with student loans. (If you have federal student loans, your family can apply for a loan discharge due to death, but that isn’t possible with some state student loans.) ¹
  
  Keep in mind that a permanent life insurance policy has the potential to accumulate cash value, which can be accessed for any purpose. But this will reduce the death benefit and available cash surrender value. 

Whatever your financial needs and goals, a New York Life financial professional is here to help. 

¹ Eric Rosenberg,“If You Have Student Loan Debt, You May Want to Get Yourself a Cheap Life Insurance Policy,” Business Insider, December 17, 2019. Businessinsider.com