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Charlie Glahe WIN Broomfield

Don't let student debt stop you from owning a house

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Debt is tricky. On one hand, carrying large amounts of it can have a severe impact on your financial health and stability. However, most individuals and families carry debt resulting from student loans, mortgages and credit cards.

In fact, two years ago, student loan debt is now the second highest obligation people have to their names after surpassing credit cards and auto loans. Newly minted graduates, whether undergrad or graduate, may be wondering if a house is affordable at this point.

Yes, you can still purchase a house, despite student loan obligations. Some strict planning will be required but, potential homebuyers can rest easy knowing they can make a life-changing purchase.

Student loan payment strategies
There are two forms of student loans: federal and private. For government assistance, the U.S. Department of Education gives students the money they need to get a higher education. For subsidized loans, the government pays interest while you're in school, whereas unsubsidized loans collect interest immediately as the money is dispersed. Following graduation, there is a six month grace period before you have to start making payments. If you don't make enough to comfortably make those payments, you can lower your monthly payment.

Private loans generally work the same, but are sometimes more strict. There are also no subsidized loans, so money borrowed from a bank or other financial institution will immediately collect interest.

Paying back loans and owning a house
It's no surprise college tuition has dramatically increased in recent years. As a result, students are graduating with more debt than ever before and may not think they can afford a home and the accompanying costs, such as a much needed house inspection.

However, becoming a homeowner while still having student debt is manageable if you make the right choices and smartly manage your finances. You'll first want to start by aggressively paying off that debt, and you can do so by making higher monthly payments.

Likewise, it is entirely possible to buy a house even if you still owe thousands in student loans. Mortgage lenders take many financial factors into consideration, among them your debt-to-income ratio, according to Zillow.

You can help yourself out by finding a house that fits within your budget. Don't splurge on something you can't afford, especially if you and your partner both have student loan debt. You'll thank yourself later instead of having to stretch your budget quite thin.

Another option for home ownership is to purchase a condominium instead of a traditional single-family home. The smaller the condo, the more affordable your monthly payments will be.

Set priorities
If your goal is to own a house, focus on lowering your student loan debt as much as possible following graduation. Instead of buying a new car or moving into an expensive apartment, set aside money for loans and a future down payment. It won't always be easy, but some lifestyle changes here and there will pay off in the long term.

If you do end up owning a house, you can then take certain steps to avoid having higher ownership costs. Smartly manage your heating and cooling to save on utilities and consider DIY repair and maintenance projects to avoid paying large sums to a contractor.

Before you move in, be sure to have a home inspection. Doing so can help reveal problems that need immediate fixing and will allow you to properly budget for those costs.

It is possible to buy a house and still pay for student loans, but you'll have to make smart financial decisions.