Maryland is one of the most highly educated states in the nation, consistently ranking in the top 5 states nationwide.
Over 40% of Maryland residents have attained at least a bachelor’s degree, with a significant portion of those holding advanced degrees. However, that also means that many of those 1.8 million residents are likely to have student loan debt from completing those degree programs.
Buying a home while paying down student loans can be challenging. In a recent poll of Maryland voters, 80% said that having student debt was a huge or medium obstacle to purchasing their own home. But that doesn’t mean you have to choose between your educational achievements and homeownership.
Here are a few considerations and actions you can take to jump start your home purchase.
Talk to a Mortgage Lender
A knowledgeable mortgage lender will take a look at your overall student debt amounts and your monthly required payments and determine if you can qualify for a loan and in what amount.
If they can’t approve you, or if they can’t approve you for the loan amount you need, they may recommend you take additional actions before you purchase a home, like:
- Refinancing Your Loans
- You may be able to lower the interest rates or lower your monthly payments, which will boost your home purchasing power.
- Paying Down Private Loans
- These loans tend to have higher interest rates and can have the biggest impact on your debt levels.
Maryland’s SmartBuy
Maryland offers a mortgage loan product geared specifically toward first-time home buyers with student loan debt.
The Maryland Mortgage Program’s SmartBuy 3.0 allows buyers to purchase a home anywhere in the state, with interest rates that are competitive with other loan products. In addition, borrowers with at least $1,000 and up to $20,000 in outstanding student loan debt can have the full amount forgiven using a 5-year promissory note. So, as long as the borrower remains in the home for 5 years, their student loan debt will be paid off.
SmartBuy loans are only offered through Maryland Mortgage Program approved lenders. You can find a SmartBuy lender near you on the MMP webpage: Lenders
