You have probably already heard this story with different variations, but hopefully, the ending of this article will reveal a light at the end of the tunnel rather than darkness. The most daunting hurdle for those looking to purchase their first home is their student debt. With more people going to college and taking on debt than ever before, it is no wonder why home ownership is being put off. Let’s take a look at the current situation and see how even with student loan debt how you may be able to find a way into your first home.

Student Debt Crisis

According to Student Loan Hero, the current student loan debt sits at $1.48 trillion dollars. That is roughly $620 billion more than the total U.S. credit card debt. Furthermore, the debt carried by graduates of the 2016 class was an average of $37,171 which is an increase of six percent from the previous year.

Also,  36.1 percent of Americans between the age of 25 and 29 had a Bachelor’s Degree in 2016 according to “How Student Loans Are Killing Homeownership.”

This is more than it was in 1980, where only 22.5 percent of people in this age group had a bachelors. However, the major difference is that while salaries have increased by 25 percent since then, the cost of school has gone up 160 percent. As a result, people have to take on larger amounts of debt, forcing them into thinking that buying a home is out of reach.

Even with Debt, Here Is How You Can Get in Your First Home

Due to people taking on large amounts of student loan debt, many have written off the idea of buying their own home. According to the article “First-Time Home Buyers Guide: Buying with Student Loans and Debt,” even with historically low mortgage rates, many consumers with student loan debt are not actively looking for ways to but their first home. As the article states, “The truth, though, is that home ownership and student debt aren’t mutually exclusive. You can buy a home, get approved for a mortgage loan, and still make good on your student loans.”

Three Things That Determine Mortgage Approval

There are three factors that you need to look at if you are seriously looking to buy a home regardless if you have student loan debt or not. These include your credit score, your household income in comparison to your household debt, and your down payment on the home you desire to buy. There are other things that are also taken into consideration such as your work history, but these three factors stand at the top of the list.

Your credit score and the amount of money you can put down toward a down payment will affect what kind of mortgage you can get approved for. You will typically need at least a down payment of 3 to 3.5 percent depending on the type of mortgage. Furthermore, you will need to meet a minimum credit score requirement.

However, the last factor, the debt-to-income ratio, will be the main number used to determine if you can afford the mortgage. To get mortgage approved your debt-to-income ratio must be less than 43 percent. For instance, if you make $3,000 a month but have a monthly debt obligation of $1,200, your ratio would be 40 percent.

Although saving enough money usually goes hand-in-hand with your salary, certain individuals with student debt may have the means to satisfy these top determiners for mortgage approval. Just because you have student loan debt doesn’t mean you have to write off buying your first home completely. Do your own research and consult professionals to identify what steps you will need to take to purchase your first home.