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My husband is about to go back to school to pursue a different industry. He will make substantially more money in his new industry and will be done with school in two years. We would like to get a house in two years, around the time he is done with school and finds a full time job in his new industry. We would love to be able to afford a $200,000-$240,000 home. We can put 10-15% down, have really great credit (both have above 800 scores), and together after he switches industries will make about $85,000-$90,000 a year. However, I do have a lot of student loan debt - about $60k, I am on income based repayment and I pay $280 a month towards. No car loans. My husband will have about $40k in debt after he finishes school. While my husband is in school, he will only be able to work part time so he will likely only make $15,000 for the next two years - making our combined annual income around $55,000. What are our chances of getting approved for a mortgage after he graduates and gets a full time job in his industry? How long would he have to be at his new job before we apply? How much will it hurt us that he is changing industries? Since his income will be low for the next two years, will it be possible to get approved for around $200,000 once we jump back up to $90,000 a year total income?
If it is W2'd BASE salary. Won't be able to use bonus, commission, or overtime. Cut the monthly gross in half, subtract monthly debts (credit report stuff), and there's your max house payment.
You could maybe qualify with the $55k. Might be a stretch with the student loans, though. But if the $90k is W2'd salary, you should be ok.
If it is W2'd BASE salary. Won't be able to use bonus, commission, or overtime. Cut the monthly gross in half, subtract monthly debts (credit report stuff), and there's your max house payment.
You could maybe qualify with the $55k. Might be a stretch with the student loans, though. But if the $90k is W2'd salary, you should be ok.
What is his current field and what will he be doing?
Most banks will consider his time in school the same as time on the job.
Pay close attention that your student loans are not in any kind of financial forbearance, as that will impact your ability to borrow.
From what we know now, you should be fine, but just as it's hard to predict income, it's equally hard to predict debt. Be very careful of the credit cards during the next two years.
Can you try to pay down your student loans more quickly?
I could afford to pay a little more a month, however I thought having a lower monthly payment would help our debt to income ratio since I thought they look at it on a monthly basis versus the total amount owed. Is that incorrect? I also wanted to be able to save a little bit more towards our future down payment.
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