5 Tips For Buying A Home Despite Having An Existing Loan Debt

Shabby pay. Loan Debt. No savings. Can portray that homeownership is out of reach? But you might be wrong. Because according to data, a lot of millennials are buying houses while still in debt. Want to know how? Then lets’ go…

5 Minutes Read

On a global scale, despite Millennials’ well-known monetary challenges, they represent the largest percentage of recent home buyers. Here is how they and other homebuyers are pulling off this gigantic foot:

1. Look for Down Payment Assistance


Look for Down Payment Assistance

Whether you ask your parents, in-laws, relatives, or save the whole amount by yourself, it doesn’t matter. What matters most is having a 20%+ down payment beforehand. It will not only reduce your interest value but also give you a lost of confidence in your home buying process.

A considerable downpayment might take a while to gather, but it will save your lot of money in interest payouts.

2. Increase Your Credit Score


increase your credit score

One good thing that comes out of loan debts is they make credit scores if you have been paying all the loan instalments on time for a year or more then the bank has built a certain amount of trust on you.

A good credit score will significantly help you while applying for a new loan or buying something or value with the loan amount. So don’t default your instalment and you will find a smooth path for your next loan application.

3. Know your debt-to-income ratio


know debt-to-income ratio

Debt-to-income ratio is your total monthly debt divided by your net monthly salary/income. E.g., if your monthly debt or EMI is equal to Rs. 10,000 and your net receivable in-hand salary is Rs. 50,000; then your debt-to-income ratio is 20%.

Calculating your debt-to-income ratio is important because banks use this information to find out whether you will be able to pay the loan or not.

Most banks and other financial institutions prefer Debt-to-income ratio to be below 50%. Consequently, if your ratio is above 50%, you should consider clearing off existing debt before buying a home.


Related Post- Which Option Is Ideal For A Home Loan Tenure: Short Term or Long Term?

4. Find a Co-borrower


Find a Co-borrower

Making your spouse, sibling, parent a co-borrower will bear half your burden. The advantage here is that it would allow both of your incomes and credit profiles to impact the application.

And that means a higher loan amount and an easier approval process. Plus, you can always set provision if you don’t want to give them ownership of the property.

5. Explore Co-living

explore co-living for loan

Even when the down payment and the bank loan are sorted, EMI still poses a worthy threat to your dream. In this situation, where you want to reduce the burden of EMI, you can rent a portion of your new home to a tenant.



Homebuyers often face questions like can you buy a house with credit card debt, or is it possible purchasing a house with student loan debt? Let us tell you clearly; nothing is impossible if you know who to reach the solution. A home is inevitable, so are the personal finances and education, so don’t get disheartened.

Because despite having an existing loan debt, you can fulfil your dream of owning a home.
For more information, visit https://www.kohinoorpune.com/



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