Do banks care about student loans for mortgages / cash out refi ?

[Bryan Stats]

Greetings there

I am new to the real estate world

Unfortunately like many young folks I am saddled with a lot of student loan debt, hence my income to debt ratio is very bad

For those who have experience attaining mortgages and/or cash out refinances, how heavy do banks weigh in student loan debt?

I have good credit and my monthly obligations on the student loans are minimal (so paying them month to month is not an issue)

In particular I am more so thinking about potential cash out refinances and whether high student loan debt will handicap me

Thank you!

[Jeff Shumway]

Hey Bryan, it will depend on a couple different factors. Are you looking to buy a primary residence or an investment property? If you are looking to buy an investment property, there are loan programs that do not look at your debt to income ratio at all. These are called DSCR (Debt service coverage ratio) loans. They only look at the anticipated rental income from the property, assets to make sure you have enough to down payment/closing costs, reserves (if applicable), and your credit. These are for investment properties only.

If you're looking at buying a primary residence, then yes DTI will come into play. You will definitely need to speak with a lender to see where you stand.