Laguna Beach Real Estate

Saving for a Home? Here’s How Your Student Loans May Impact This

If you chose a career that required a college education then there is a good chance you are now stressing over your student loan situation. Not only do you need to work these payments into your budget, you also have to think about what your debt-to-income ratio is – especially if you plan on applying for a mortgage. Of course, before you even apply for a loan, you need to save for a down payment. How are your student loans going to affect your ability to save?

Market Plays a Leading Role

Although seeing general statistics may make this topic be easier to understand, there is a good chance that the results will not represent your area. Every city is different. In some cities, college graduates can save a little faster. However, there are also areas where grads with no student loans were able to save significantly faster for a down payment than those with loans. In fact, the difference is pretty drastic in some areas, such as Las Vegas and El Paso where the timeline was 1.5 years faster for those without student loans.


Just because you have graduated from college does not mean you will make more money than someone who never sought a higher education. Base salary for a white collar job that required an education could be significantly less than someone with 20 years under their belt in a factory for one of the major automakers or a roofer or builder in a high-growth area. If you have the flexibility then move to where your career is in demand and willing to pay a little more.

Housing Costs

No one probably has to tell you that saving for a down payment for a small home in San Francisco, San Jose, Scottsdale, Seattle, New York City, or San Diego is going to take you a lot longer than saving for one where housing is significantly less expensive, such as Buffalo, Garland, Detroit, Pittsburg, Fort Wayne, Corpus Christi, Rochester, and San Antonio.

However, in some areas it takes college graduates a shorter or longer time than those without a degree. Degree holders on average can save for a down payment faster in places like Detroit and Camden, but in Dayton, Cleveland, Pittsburgh, and Buffalo, non-degree holders saved faster. Rochester, New York, is one of the rare places where both parties average the same amount of time. In every major city in California, degree holders saved a lot faster, even with their student loans.

Although having student loans could slow down your savings, statistically you will likely have a higher lifetime income, which could make it easier financially to afford your home long-term or upgrade in the future.