My Student Loans Are Keeping Me from Buying a House

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Sam Schumacher is keeping a close eye on the real estate market where he lives, in Oakland, CA. He’d love to buy a live/work space where he could put a studio for his hand-blown glassware company, Rocket Glass Works, and also cook himself dinner at night.

Currently he pays rent on a house he shares with three roommates, and he also rents studio space at a cooperative for his business. “I pay a daily rental rate for every day where I do production work in the studio, which is about $300 a day,” says Schumacher, 26. “So I do as much work as I can out of my house. I have a little studio carved out in our living room where I store inventory and do packing and assembly. No molten glass there.”

Unfortunately, although he’s keen to combine his two spaces, it’s probably going to be a while before he can contemplate a down payment.

Squeezed by student loan debt

That’s because Schumacher graduated from college five years ago with a degree in political communications and just over $70,000 in student loans, most of them private. His payments are now $650 a month—and will be for the next 20 years if he sticks with the payment schedule.

“Even though I got into several other good public schools, and I even got offered a full ride with a stipend at another school, I was totally in love with Emerson College, where I ended up,” Schumacher says. “As a foolhardy 17-year-old, I said, ‘You know what, I’m not going to let money influence this decision. This is my education; I’m not going to worry about it if I have to go into debt.’ Now it looks a little different on the other side of things.”

Although he’s applied for refinancing, his most recent request was denied. In the meantime, he’s paying between 9% and 11.75% in interest on the loans and struggling to set savings aside for anything else.

“At this point, I can’t even fathom holding onto any money when I could be putting it on my loans,” he says. “Because of the interest rate, it just doesn’t make any sense.”

Trying to pay it off faster

He briefly moved in with his parents to try to pay his loans off more quickly, and although he shaved $20,000 off his total bill, he couldn’t stay there forever. Now he works four jobs other than running his own business. “I run around a lot, basically trying to fill my days with as much work as I can take on,” Schumacher says. “That means 13 to 14 hour days are pretty regular for me right now, and very few days off.”

He’d love to buy a property he could use as a home and studio in the next few years, but concedes that it might only be possible if his parents help him with the down payment. And even then, he’s not sure he can justify the purchase. “It’s this weird balancing act,” he says. “Is it worth it to be putting money into a mortgage when I still have all this debt?”

But in the end, he sees buying property as an important investment for his personal and financial future. “I think it makes a lot of sense in the long term,” he says. “I’m just trying to scramble and figure out a way to make it happen.”

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Buying a Home Is Still an American Dream — Here’s How to Make It a Reality

American dream

Think millennials don’t care about owning a home? Think again.

The latest U.S. Housing Confidence Survey (HCS) confirms that this generation, along with a growing percentage of non-white Americans, has more confidence in the housing market than the rest of the population does.

Turning that confidence into action could lead to a great future for the housing industry. And despite the current market’s difficult climate, gaining approval to become a homeowner is simpler than one might expect.

Confidence vs. Reality

The HCS found that 65% of Americans aged 18 to 34 believe the American Dream goes hand in hand with owning a home. This is just slightly higher than the 64% of baby boomers (age 65 and up) who responded similarly. Meanwhile, 70% of Hispanic respondents, 64% of Asians, and 63% of African-American participants agreed with the idea.

That’s a lot of hope for an industry that appears to some as increasingly more difficult and complicated to enter. Rents are rising as incomes are staying flat, and this is keeping millennials in rental situations for longer than previous generations, as they postpone making major life decisions and lack the funds for a down payment.

But even in the midst of chaotic financial markets and wavering confidence from investors and consumers, the U.S. housing market has stayed resilient. Explains Terry Loebs, founder of research firm Pulsenomics LLC, “Housing confidence has increased in every metro area surveyed over the past two years and fueled the market recovery.”

And according to Zillow’s Chief Economist, Dr. Svenja Gudell, today’s optimism could help create tomorrow’s stability. “These Americans represent the next generation of U.S. homeowners, and for homeownership to eventually become a reality, it has to start as a dream.”

Take the First Steps

If you’re an aspiring homeowner (millennial or otherwise), you can take a couple quick steps to see what your odds are of landing that dream home in the first place.

The most important first step is to check your credit score. You can check two of your credit scores for free every month on Your credit score will determine whether you can get approved, as well as your interest rate and how much house you can afford. The pre-approval process consists of providing necessary documentation (e.g., pay stubs, tax returns, W-2 forms) to your lender.

Depending on your results, once you check these two items off your to-do list, you’ll be that much closer to transforming your homeowner dreams into reality.

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Image: Monkey Business

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