One question often asked by home buyers is, “Does student loan affect mortgage?” The answer depends on the borrower and the lender. For some, student loan payments will negatively impact the mortgage approval process, but others will not. Here are some general guidelines to follow. You don’t want to overextend yourself. If you’re already under a lot of debt, consider getting a loan with less than 100 percent financing. This will ensure you don’t end up with too high of a debt-to-income ratio.

The first rule to follow when applying for a mortgage is the gross debt-to-income ratio. While student loan payments won’t affect the overall ratio, your payment history can negatively affect your mortgage approval. Usually, your monthly payments count towards the ratio of your debt-to-income ratio, which measures your ability to pay your mortgage payments. If you have a higher debt-to-income ratio than this, you might be ineligible to get a mortgage.

However, a low-interest rate and historically low mortgage rates are good news for people with bad debt. But if you’re carrying a significant amount of student loan debt, you should keep in mind that your mortgage application will be more difficult. And remember, the mortgage lenders will look at your debt to income ratio, and they want to see that your debt-to-income ratio is under 30 percent. You also want a good track record of paying your bills, so that you can demonstrate your ability to pay for your loan.

If you’ve been paying off your student loan and have some money left over, consider consolidating these debts. You can pay off your credit card debt first, as it’s cheaper than most other types of debt. After all, paying off student loan debt early is rarely a good idea, anyway. However, it may be tempting to pay off a large part of your student loan before applying for a mortgage. If you can’t afford to pay the full amount, try to pay off just one payment before you apply for a mortgage. You’ll save a great deal of money in the long run.

If your student loan is federally backed, you’ll have to file a report with the agency, so your lender can check if you’ve defaulted on your loan. If you’re in this situation, you can ask the lender for a modified repayment plan, but this may require multiple lenders. If you have a standard repayment plan, you can use your savings or even take a second job to increase your income. It’s important to note that student loan payments can affect your monthly mortgage qualification.

If you have outstanding student loan debt, you must disclose it when applying for a mortgage. Input the amount you’ll be paying each month into the relevant expenditure box on the mortgage application. Be sure to enter the exact amount you’ll need to pay each month, as your lender will cross-reference it with your payslips or tax year overviews. If your monthly payments fall below the monthly repayment threshold, you won’t have to include the student loan on your mortgage application.