Your Debt Is Not a Deal Breaker: How to Buy a Home with Student Loans and Car Payments

If you have student loans, a car payment, or both, it’s easy to assume homeownership has to wait. Those monthly payments can make a mortgage feel out of reach and it’s completely normal to wonder if lenders will see your debt and instantly say “no.”

But here’s the truth most people don’t hear enough:

Debt does NOT automatically disqualify you from buying a home.

Millions of buyers purchase homes every year while managing the same obligations you are. What matters isn’t being debt-free, it’s understanding how your debt fits into the bigger picture.

Instead of thinking: “I can’t buy a home because of my debt,” shift to: “I can buy a home I just need to understand what’s realistic for me.”

That’s where the Employee Homeownership Program comes in.

It’s Not About the Debt, It’s About the Ratio

Lenders aren’t expecting you to have zero debt. In fact, most buyers don’t.

What lenders evaluate is your Debt-to-Income (DTI) ratio, the percentage of your gross monthly income that goes toward your monthly debts, including your future mortgage.

Your student loans and car payment are just part of this equation not an automatic roadblock. The goal is simply to show that after paying your normal bills, you still have enough room in your budget to comfortably take on a home.

What Lenders Typically Look For

Small Changes Can Make a Big Impact

If you feel unsure about your numbers, don’t panic. Improving your financial position is often easier than people expect.

Here are a few high-level examples:

• Consistent, on-time payments matter: Your history of paying your student loans and car payments on time actually helps demonstrate reliability.
• You may qualify for loan programs that are friendlier to existing debt: Certain government-backed options offer more flexible DTI limits or consider student loans differently.
• You don’t always need to pay off debt and sometimes shouldn’t: Reducing a balance by a small amount can help. Paying off a debt entirely might not be necessary. And draining savings to pay something off can sometimes hurt more than it helps.

The key is knowing which move is the right move for you, not guessing.

You Don’t Have to Figure This Out Alone

Understanding how your debt plays into your homebuying plans can feel overwhelming but this is exactly what your Employee Homeownership Program is here for.

During your free financial fitness consultation, we’ll help you:

• Understand your current DTI and what it actually means
• See whether you should pay down, pay off, or leave your debts exactly as they are
• Avoid paying off debt unnecessarily (which many people do)
• Review your personal budget to find a mortgage payment that fits your lifestyle
• Understand why lenders sometimes approve buyers for more than they’re comfortable spending
• Learn whether a lender would approve you now, even with your current debts
• Build a personalized, realistic homebuying plan designed just for your situation

You don’t need to be debt-free. You don’t need to figure it out alone. And you definitely don’t need to guess what the “right” next step is.

Bottom Line

If you’re curious whether your student loans or car payments are really holding you back, schedule your free financial fitness consultation today. We’ll walk through everything together so you can take the next step with clarity and confidence.

SupportSquad@AdvantageHomePlus.com | (800) 511-2197

The information contained and the opinions expressed in this article are not intended to be construed as investment advice. Advantage Home Plus does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. * Real estate commission contributions are available as state laws allow.