Increasingly, young people are delaying the pursuit of home ownership because of outstanding student loan debt — which now tops $1 trillion, according to the Consumer Financial Protection Bureau.
“Some student loan payments are as high as a mortgage,” notes Cari Sweet-Kostoplis of the Jersey Mortgage Corp.
Student loan debt now surpasses the amount owned on all credit cards issued in the U.S.
And unless Congress agrees to extend subsidies to keep student loan rates at 3.4%, the rates are set to double in July 2012.
Because most lenders’ underwriting standards limit total debt payments to just 45% to 50% of a borrower’s adjusted gross income, many first-time buyers are rejected for home financing, which usually accounts for 33% to 35% alone.
SOURCE: “Student-Loan Debts Keep Them From Buying Homes,” Sarasota Herald-Tribune