Student Loan Debt and Mortgage Loans

If we were sitting down together at my kitchen table or in a cozy coffee shop in Raleigh or Durham, this is exactly what I’d tell you about Student Loan Debt and Mortgage Loans.

Student loan debt payments are officially back. After years of pause and political debates, the reality in 2025 is: if you borrowed for college, it’s time to start repaying those loans. That’s not exactly fun news, but it’s manageable—especially if you take some time to plan.

And here’s why I care so much: as mortgage lenders, we talk to first time buyers every day—especially around Chapel Hill, Apex, and Garner—who are just starting their careers and trying to balance their finances. For many, student loans are the biggest source of anxiety when thinking about buying a home.

So, let’s talk about how to get your arms around student loan debt now, so you can position yourself to buy a home in the Triangle later this year—or next.

Step 1: Budget Honestly

The first step is the hardest—but also the most important: make a budget. Don’t overthink it. Just pull up your bank account, Venmo, or credit card and go through your last 2-3 months of spending. Break it into buckets:

• Rent or housing
• Groceries
• Car & gas
• Eating out (be honest here!)
• Subscriptions & shopping
• Loan payments
• Savings (hopefully!)

Look at where your money’s really going, and figure out what you can change. That’s your roadmap. There are apps like PocketGuard or Mint to help you track this—and no, we don’t get paid to say that. We just like tools that don’t try to sell you something else.

If you don’t know where your money is going, it’s really hard to make a mortgage fit later.

Step 2: Understand Your Repayment Options

Now let’s talk loans. In 2025, federal student loan payments are active again, and most borrowers are either in a Standard Plan or an Income-Driven Repayment Plan (IDR) like SAVE, PAYE, or IBR.

Income Driven Repayment plans cap your payments at a percentage of your discretionary income (usually 10%). They sound great—and often are—but here’s the catch:

You have to prove a partial financial hardship to qualify.

That’s where it gets tricky when applying for a mortgage. Because when you say to the government, “I can’t afford to pay more than $82 a month on my loans,” but then you ask us to approve you for a $1,900/month mortgage… that’s a red flag.

It doesn’t mean you can’t buy. It just means we need to carefully document everything and be strategic about your timing and your budget.  READ:  Talk to a mortgage lender early so you can create the best plan.  We won’t bite, and it is a free consultation!

Step 3: Make a Plan That Works for YOU

Once your budget and loan payments are clear, ask yourself: what’s realistic for me this year?

Maybe you pick up a side hustle for 6–9 months. (Teaching swim lessons at the YMCA? Dog walking? Delivering for Amazon Flex?) Set a timeframe, stash that money into savings, and reassess later.

If your goal is homeownership—especially in areas like Holly Springs, Hillsborough, or Pittsboro—then every dollar saved makes a difference.

Step 4: Know the Mortgage Rules Around Student Loan Debt

Mortgage guidelines around student loans have tightened in recent years. Here’s what you should know in 2025:

FHA Loans: We use the actual IDR payment if it’s reported on your credit AND is greater than $0. If it says $0, we have to calculate 0.5% of your balance—even if you’re on SAVE or IBR.

Conventional Loans (Fannie Mae/Freddie Mac): Same idea—we can use your reported payment, as long as it’s not $0.

USDA Loans: These are more rural-friendly (think parts of Johnston or Chatham counties), but we usually have to calculate 0.5% of the balance—unless there’s solid documentation of a fixed payment.

The bottom line? If you’re thinking about buying a home in the next 12 months, let’s talk through your student loan debt situation first. It may not affect your approval at all—or it might be the key thing we need to plan around.

Step 5: Don’t Let Student Loan Debt Define You

We talk to teachers from Chapel Hill-Carrboro Schools, nurses starting at Duke, and recent grads from NC State or UNC all the time who feel like their student loan debt balance defines their financial life. It doesn’t.

It’s just a piece of the puzzle. With the right strategy, a little patience, and a clear plan—you can still qualify for a home. And we’re here to help you map it out.

Let’s Chat

If you’re in Raleigh, Durham, Chapel Hill, or anywhere in between and wondering if you can buy a home with your student loan debt… the answer is probably yes—but it starts with a conversation. We’ll pull the numbers, talk strategy, and walk through it together. No pressure. Just good coffee and even better info.  📞 Call, text, or email Steve and Eleanor Thorne anytime, 919 649 5058. We’re happy to help.