Still got massive student loan debt on the books? Join the 43 million other borrowers who do too. And among all the millennials who are still chipping away at their student loan debt, over one-third of them plan on buying a home within the next five years.

But with all that debt still to be paid off, is getting a mortgage and purchasing a property a futile endeavor?

Student loan debt – just like any other type of debt – can be an obstacle to overcome when it comes to getting approved for a mortgage.  But while the situation isn’t exactly ideal, it’s less dreadful than many millennials might think.

Understanding how student loan debt can affect lenders’ decisions will help you determine the likelihood of getting approved for a mortgage, and what type of interest rate you can expect to be offered.

Monthly Payments Matter

Lenders look at a bunch of things when figuring out if you make a good candidate for a mortgage, including how much debt you’re currently carrying and how much it takes up your monthly income. This is referred to as your debt-to-income ratio – the percentage of your monthly gross income dedicated to paying off debt – which lenders look at before they consider approving you for a home loan.

If you’ve got a ton of outstanding student loan debt and your current salary isn’t very much just yet, your debt-to-income ratio won’t be the greatest. Lenders usually like to see a debt-to-income ratio of no more than 36, but each lender might have their own threshold that they may agree to work with.

Let’s say your gross monthly income is $5,000, and other monthly debt obligations – including your student debt – amounts to $2,000. That means your debt-to-income ratio is 40%, and that’s not including what it would be after adding a monthly mortgage payment on top of it.

If you find that you’re over the limit of what your lender deems acceptable, you can always choose to extend your repayment period to reduce your monthly payments. However, it’s important to note that it’ll take a lot longer to pay off your mortgage this way, not to mention the fact that you’ll be paying more in interest over the life of the mortgage.

Refinancing your private student loan to a longer loan term may also be an option. You might even find that you can lower your interest rate too by going this route. However, just like in the above scenario, you need to be prepared to accept a longer repayment term. Even if you’re able to negotiate a lower interest rate when refinancing, you’ll still likely be paying more towards overall interest by the time the loan is fully paid off.

Deferring Your Loans Plays a Key Role

You’ll likely have the option to defer your student loan for a certain amount of time, depending on your lender. That means you temporarily won’t be obligated to make your regular monthly payments towards your student loan debt. Sometimes you might even be able to work something out where no interest is accrued despite the absence of payments.

Deferring your payments for a short period of time can be a great way to save you money for a sizeable down payment, which will work in your favor when mortgage lenders look over your credentials.

On the other hand, this option may have a negative effect on your application. Lenders will estimate what your monthly payments will be based on the amount of money you still owe on your student loan, but this estimate does not factor in how much your payments would be if you opted for an extended repayment plan, for instance.

It’s important that you fill your lender in on precisely how much you’ll be paying every month after the deferment period ends so that the most up-to-date and accurate data is used to grade your mortgage application.

Your Payment History is a Critical Factor

The amount of money that you owe in student loan debt – among other types of debt – as well as your income, are important factors that your lender will consider, but they are not the only ones. Your credit score also plays a critical role, and it’s heavily influenced by your history of making payments.

If you’ve been delinquent on payments, your credit score will plummet. In fact, even one missed payment can shave off as much as 100 points from your credit score.

Making your monthly payments on time and in full is essential to maintaining a healthy credit score. If you’re scraping the bottom of the barrel just to make your payments, then reducing your monthly payment amounts by extending your repayment period or consolidating your debt might help to bring your monthly payments down. That way, the amount you have to pay each month will fit more comfortably within your budget, and will help you stay on track with timely payments.

The Bottom Line

Student loan debt isn’t exactly something that mortgage lenders want to see on your books, but with millions of millennials looking to buy over the next five years, it’s something they’re becoming increasingly accustomed to. The fact of the matter is, student loan debt doesn’t mean you’ll be written off completely.

Your income and overall debt amount certainly count, but so does your proven ability to repay whatever loans you’re currently responsible for. Solid money management can go a long way in boosting the odds of your mortgage lender stamping “approved” on your loan application.

When you buy a condo, townhouse, or any other type of property in a planned development, you’re bound to the rules of the Homeowners’ Association (HOA). While you might have already known that rules existed when you bought, you likely never gave them a second thought, until there’s a problem.

It’s obviously important to know how much you have to pay in HOA fees to cover the cost of maintaining common areas of the building or community. But there’s a lot more to know about HOAs and how they work before you decide to make a purchase in one of these communities. 

1. The Unit Needs to Be in Compliance With HOA Rules

HOA rules are to be followed by every unit owner in the building or complex. If a unit is non-compliant with the current rules, the HOA will step in. You’ll basically be inheriting problems if you buy into a property that’s already raised red flags with the HOA, which can give you nothing but headaches afterward. Before you make a purchase, find out what the rules are, and if the property is compliant.

For instance, a unit may have tile flooring on the balcony or a BBQ hooked up that the HOA strictly prohibits. If the unit is not currently compliant, determine what changes will need to be made before you seal the deal. 

2. HOAs Can Dictate How Your Landscaping is Maintained

If you live in a gated community or subdivision that’s governed by an HOA, you’ll have to abide by its landscaping rules. For instance, many HOAs don’t allow the use of pesticides and fertilizers on the grass, or they’ll limit the size of vegetable gardens. You might even be prohibited from installing solar panel systems or building compost. Make sure you identify any restrictions before making any buying decisions.

3. You Need to Make Sure You Can Tolerate Stringent Rules

What is your personality like? Are you the type of person who isn’t fond of being told how you can and can’t maintain your property? If so, you may want to rethink a particular HOA complex, or forego HOAs altogether.

One of the things that homeowners love about owning a home versus renting is the freedom they have to modify their properties. But HOA rules can have a huge impact on this liberty, depending on how strict the rules are.

4. Details About the Fees Should Be Identified

Everyone knows that along with HOA community living comes fees, but it’s up to you to find out exactly what these fees cover, aside from just the amount you need to pay each month. Find out how these fees are determined, and how often increases will occur.

Identify what the fees have historically been over the last few years to get an idea of what to expect as far as potential increases in the near future. And don’t forget to ask about the reserve fund, and if it’s capable of covering any major repairs that may be on the table.

5. Under-Management Can Be a Major Problem

Property management plays a critical role in HOA communities. They’re responsible for maintaining the property, dealing with problem residents, ensuring the HOA rules are followed by all unit owners, making repairs, and resolving owner complaints.

An under-managed property will have a team that is not present very often, and doesn’t seem to really care about the well-being of the property nor the concerns of the residents. Try to find out what the property management company is like, and see what current owners have to say about how they manage the property.   

6. Does the HOA Have Catastrophe Insurance on the Building?

This is a particularly important point if you are considering buying in a building or complex that’s located in an area that’s prone to natural disasters, such as floods, hurricanes, fires, or earthquakes.

Of course, freak disasters can happen just about anywhere, so it’s best to find out if the HOA you’re thinking about buying into has catastrophe insurance. If it doesn’t, and the complex is damaged as a result of a natural disaster, the HOA may go after the owners to pitch in to cover for repairs.

7. How Will the HOA Affect Your Finances?

The purchase price of the unit itself is one financial factor to consider when creating a budget, but you also need to understand how the monthly fees will affect your finances. It could very well be that high HOA fees could cost you a lot more than a freehold detached home that you think doesn’t fit into your budget.

8. Conflict on the Condo Board of Directors Can Be an Issue

The condo’s board of directors is made up of owners of the HOA. Ideally, all members should have the best interest of the complex and its owners in mind, and should get along. However, many boards are made up of owners who don’t see eye to eye, and are conflicted on just about every issue brought to the table.

Sometimes board members may have an agenda aside from running the building, including hiring companies that they have direct interest in just to put some money in their pocket. Other members may be on a power trip and don’t make decisions based on the good of the building.

Speak with the current owners to get a sense of what the current board is like, or have a chat with the members themselves. You may even want to become a member yourself after buying into the community so you can be more involved in making the community a better place.

Even though laws exist that govern how HOAs behave, these associations still have a lot of power over your homeowner rights. As such, you’d be well-advised to find out as much about the HOA before buying into the complex.

Savvy scammers are always on the lookout for a way to swindle money from unsuspecting victims, and the real estate industry is by no means off limits. Of course, the overwhelming majority of buyers, sellers, agents, landlords, and others involved in real estate transactions are honest, but there are a few bad apples out there who spoil the bushel.

Considering how much money is being played with in a real estate transaction, it’s critical to get educated on the normal steps in the process in order to be able to spot a scam in the works.

Luckily, there are plenty of warning signs that will present themselves that will give you the opportunity to take yourself out of harm’s way before you get scammed. Here are some red flags to watch out for so you don’t get scammed, which typically come about when you’re not being represented by a real estate agent.

Investors Using Questionable Marketing

You’ve probably seen them before: signs plastered to anything stable, like a light post or mailbox, that say something along the lines of, “We Buy Houses.” Legitimate, professional real estate agents or investors are not in the business of advertising their listings illegally or in poor taste. If the type of marketing that you see when it comes to real estate is free, it’s highly possible that it isn’t legitimate.

Foreign Buyers Promising to Pay All Cash Without Seeing the Property

While it’s common for foreign investors to buy into the US real estate market, they usually do so with the help of an agent representing them on home soil. Details about the property will most likely be provided, including photos of the interior and exterior, and all the financials will be handling legitimately through a financial institution or an accredited attorney.

You should already have your back up when it comes to dealing with foreign buyers, especially with money laundering being a real issue. But a buyer from out of the country offering to buy your home in cash on the spot without asking much about the property is a red flag. Most people who are spending big bucks to buy a property will want to see it, or at least have their local agent pay a visit. Scammers won’t, and likely won’t even ask any questions about the property.   

Buyers Giving Too Much Information

Most people would be hesitant and careful about providing sensitive information about themselves, especially financial information. For this reason, you should be very skeptical of a supposed buyer who is offering up detailed information even when they’re not being asked for it. This is especially true if all this info is being shared via email.

Many times scammers will take a snapshot of various types of financial records, such as a bank statement, and email to potential victims. They’ll also list a host of contact information, including phone numbers, email addresses, mailing addresses, and so forth. Providing all this information makes them look like they’re the real deal. And they’ve got nothing to lose, because all that info isn’t even real, anyway.

Overly Eager Buyers

Many times legitimate buyers will fall in love with a home and decide to pounce on it before anyone else can. Such scenarios are common, and totally legit. But scammers who either call or email you expressing their interest in buying your home, and are overly zealous about snagging it should be handled with extreme caution. If they seem way too excited about sending a down payment or deposit to their lawyer without even haggling the purchase price, you’d be well advised to quash the transaction before it even starts.

Scammers Claiming to be Agents Who Are Owed Commissions

Some scammers try to haggle commission money out of sellers, even when no real estate agent has even entered the picture yet. Many con artists will attend an open house and gather up the seller’s contact information. Once they’ve got it, they’ll contact the seller pretending to be a real estate agent for a supposed interested party, and will try negotiating a price on behalf of their ‘clients’, including the commission.

You don’t have a business relationship with this individual, nor do you have a signed contract outlining the fact that this person is representing you as your agent in the transaction. Nor is there any contract being presented to you detailing the fact that this person is representing the buyer, as well as the commission structure. The moment you are told that you need to pay commission fees before a sale has even been made, you should hang up the phone.

The scammer may even go so far as to threaten to sue you for a “finder’s fee” for bringing a supposed interested buyer your way. No evidence has been provided that there actually is a real bonafide buyer, nor has any transaction even been made. This is where all communication with this individual must cease.

Requests to Wire Money

Anytime you hear the words “wire money” come up in a conversation with someone you don’t know, run. The majority of scams involve funds that have been wired. Scammers will come up with a host of compelling reasons why money would need to be sent tough a wire transfer rather than through a bank or lawyer.

Scams like these can happen whether you’re on the buying or selling end. If you’re selling, scammers will wire you their deposit, then request some of it back because they “accidentally” overpaid. In this case, you’ll send the money, and never hear from them again. If you’re buying, the supposed “seller” may ask you to wire the deposit money to them because they either don’t live in the country or are currently unavailable to receive the money any other way. Regardless, wire transfers have no place in a real estate transaction.

Scammers are everywhere, and they typically present themselves as legitimate professionals who know how to put on a good act. When it comes to money matters, always err on the side of caution, especially if your gut tells you something isn’t quite right. 

A steady, predictable, and adequate income stream throughout retirement is a must for anyone in their Golden Years who wants to live comfortably long after they’ve said goodbye to their careers. But without a decent pension, considerable savings, or sizeable dividends from investment vehicles, having the pool of income needed to keep up a certain lifestyle after retirement can be downright difficult.

Luckily, real estate investments offer another lucrative and attainable channel to pad retirement funds.

Collecting Passive Income From Rental Properties

While high investment risk is something that a thirty-something might be able to tolerate, it’s not something to toy with once retirement hits. The goal at this point is to protect your invested capital while generating an income stream at the same time.

Investing in real estate provides opportunities to deliver cash returns, whereby you continue to generate cash flow from your capital contribution. Ideally, real estate investing can provide you with the cash dividends necessary to not only cover operating expenses, but expand your bottom at the same time.

If done right, real estate investing can bring in a steady stream of income no matter what current economic conditions are like, unlike the stock market. They can appreciate over time, leaving you with a comfortable financial cushion to rest on in retirement.

One of the best sources of passive income comes from rental properties, be they commercial or residential. And if you are financially secure and have some time to play with before entirely depending on your rental income to sustain your livelihood, you don’t necessarily have to generate a profit right away in order to make the investment of an income-producing property worth your while.

Now is still an ideal time to purchase rental properties, as interest rates are still low and rents continue to increase in many areas.

While you can always play the stocks to a great deal of success, there’s something inherently safe about real estate investment that is almost a sure shot if you play your cards right. Investing in real estate offers a lot more control over property appreciation compared to the stock market because you have a hand at boosting its value, and in turn, its income.

Rents are always going to increase, and the value of real estate is almost always going to go up as well. Not only will you be collecting residual income from rent, you’ll also be reaping the rewards of an increase in equity without hardly lifting a finger. As you pay down the principal portion of your mortgage, the equity will continue to build.

Eventually, you’ll have enough to potentially borrow against the equity in the property in order to finance some of life’s major expenses, or even finance another real estate investment altogether. Of course, the earlier you start investing in real estate for retirement income, the better. 

At some point, your income will steadily climb over time, even if you’re only seeing a marginal profit at the beginning.

Tax Breaks Accompany Rental Properties

You should also consider the tax breaks that you’ll be able to take advantage of as an owner of a real estate investment property. The IRS allows property investment owners to depreciate the building portion of the property over 27.5 years, which means a lot of your cash flow can avoid the tax man.

Of course, such depreciation will have to be recaptured if you ever sell the property in the future. But if you keep the property for life, and you outright own it when you pass away, that depreciation no longer exists. Anyone who inherits the property from you won’t be stuck with paying it. 

Know Before You Buy

There are obviously specific traits that will make one investment property trump another when it comes to profitability: single or multifamily homes in a desirable area is key.

The average investor should also be prepared to buy and hold for the long haul, particularly if the market is somewhat unstable. Properties that are able to bring in a minimum of 6 percent positive cash flow – after costs – should be focused on in order to make sure that more risk is being taken on than necessary.

Even if you plan on bringing a property management company on board to deal with the building and tenants, it’s still best if you can keep an eye on it yourself. That means buying in a location that you can easily get to. 

Of course, before buying anything, make sure you hire a home inspector to uncover any expensive potential repairs, such as replacing the roof or rewiring the entire property. Determine what the forecasted monthly costs will be (on top of your mortgage payments), including insurance, property taxes, maintenance fees, and vacancy rates.

Making sure the numbers work in your favor is key to ensuring the investment will be a profitable one. There needs to be a big enough rental income stream to cover all the expenses related to holding and maintaining a real estate investment property. Determine whether or not the actual market rent that can be realistically demanded is at or above the going rental rates.

Your real estate agent will be able to tell you how much nearby rental properties of similar size command, which will give you an idea of how much positive cash flow you can realistically generate each month. These professionals will also be able to fill you in on how long it takes for vacant rental properties to find renters, and how fast they appreciate in the event that you consider selling.

Real estate is typically an excellent investment vehicle for retirement, and if you do your due diligence, it can really pay off.

You can learn a lot about a home from an Open House. While you’re not going to be climbing through the attic or sticking scopes down the plumbing pipes (leave that to the home inspector), you can still find out plenty about a property just by being vigilant.

The next time you attend an Open House, make sure you keep your eyes peeled on the following.

1. The Neighborhood

Before you even get to the house, be sure to have a look around at the neighborhood in general. If you’re going to consider living in the area, you’ve got to make sure that it fits your lifestyle, whether it’s a quiet or bustling one that you’re looking for. Scope out all the amenities, such as nearby schools, shops, and parks.

While you’re at it, keep an eye out for the neighbors, or at least their homes. You want to see how they take care of their properties, especially those that are adjacent or backing onto the property in question. You’re buying the neighborhood just as much as the home itself, so make sure it’s a place you’ll be happy living in.

2. The Home’s Exterior

While you might want to dart right into the home’s interior, take a walk around the perimeter of the home first to check out the structure’s exterior. Have a look at the siding, brick, or whatever the exterior walls are made of. See if anything is chipping, peeling, or fading. Check out the roof to see what shape it’s in, and look for any cracks in the foundation.

What’s the state of the gutters and exterior windows? What about the driveway and exterior walkways? If there are a number of issues on the exterior that need repair or replacement, you’ll want to take them into consideration if you decide to put in an offer.

3. The Layout

Professional photos posted online may give you a good sense of what the home looks like, but it’s nearly impossible to get a feel of the exact layout of the space, and how it flows. While some homes have a more attractive and practical layout than others, what works for one type of family may not necessarily work for another.

Open concepts are hot these days, but there are still many families that prefer to have rooms sectioned off for more privacy and defined spaces. Some families want all bedrooms on the same floor, while others don’t mind the master taking up its own floor, for instance. It’s important to determine what the exact layout of the home is, and if it’s suitable to your family’s lifestyle. 

4. Room Sizes

Many homeowners make descriptive brochures available at open houses which outline a number of pertinent details about the property, including room dimensions. You’ll want to get a good idea of how large the rooms are so you can determine if the furniture you’ve already got will fit in the space or if you’ll have to buy new pieces to accommodate for the room sizes.

If such information is not readily available, ask the real estate agent on site who’s hosting the Open House for these numbers. At the very least, they should be detailed in the actual listing.

5. Privacy

Most likely, you’ll want to enjoy the comforts of your home in peace, without constantly being on display. Is the backyard fenced in, or surrounded by hedges? Does the neighbor’s master bedroom window abut the bathroom window of the home you’re checking out? Such issues don’t have to be deal-breakers; there are ways to deal with them, but it’s still a good idea to see what you’re working with.

6. Smells and Stains

Pay special attention to any stains on the floors, walls, and ceilings. These may be signs of major issues, such as roof problems, draining issues, or previous floods. Any moisture in the house can lead to serious issues, such as mold and mildew, which are dangerous to be exposed to for an extended period of time.

Not only will your eyes point to potential issues, but so will your nose. Even if you can’t see any obvious stains, any musty smells will tell you that something may be lurking. Don’t ignore your senses; instead, find out more about what’s behind what you’re seeing and smelling.

7. Closet and Storage Space

Organization is key to keeping your home neat and tidy, but without adequate storage space, your home can get cluttered extremely quickly. During the tour of the home, don’t be afraid to open up every door. You want to see how many closets and storage rooms there are, as well as how much they can house. You now how much stuff you have, so make sure the home is able to accommodate it all before you get emotionally attached to it.

While there’s only so much that you can identify when meandering through a property during an Open House, there’s certainly a lot that can be learned just by being aware of specific issues. Keep the above factors in mind so you know what to look for, and what questions to ask.