Mortgage Loan / Student Loan, which to take out first?

[kristarr]

I am planning to buy a house and start grad school around the same time.  Does it matter which comes first, mortgage loan or student loan?  And do federal loans and/or private loans allow you to use student loan money that would have been allocated to rent for mortgage instead?  Do mortgage lenders consider the part of my student loans set aside for living expenses as money available to make a mortgage payment?  Do mortgage lenders consider me more or less risk having student loan money set aside vs. student loan payments as obligation?

My situation: 

-- Will need student loan of about $10,000. I assume most of this will be federal student loans

-- I am looking at a house in the $80-$100K range, with 10% down payment.

-- I will also be working while in school, but I will be bartending which is high income but mostly tips (hard to prove/verify income other than bank deposit receipts), and I also think many lenders look at bartending differently than many desk jobs even though it pays far better (the avg fri/sat night is about $40-$50/hour).  I expect to work as much as needed to show the income necessary to obtain the loan, what percentage of mtg pmt will they want to see as income and is it gross income they consider?

Expenses and Credit:

--  I currently have one credit card account open (paid in full each month), and a motorcycle installment loan. 

-- Credit score is around 720 and rising rapidly as a few delinquencies from 2007 on revolving accounts fall farther back. My installment loan is new so I expect as I make payments my score will go up due to an installment loan added to my credit mix.

-- Total monthly obligations include $88 motorcycle, $35 cell phone, and about $10 in gas (thanks to 60+ mpg!)

Any advice on whether I should shoot for the mortgage or the student loan first?  Or other things lenders may see as a red flag that I should consider?  I've worked really hard to get my credit score up (was at 520 two years ago) because I knew school/home were my plan, and I don't want to do something now to blow my chances! Thanks for any advice you can give.

[BrianB_The_Loan_Professor]

It is not clear if you will qualify for the mortgage

You will need to show the previous two years taxes to document the income

if you can do that then I would suggest going for the mortgage first

Student loans are easy to get

Mortgages are becoming a little tougher

As far as using student loan money for your mortgage - you cannot do that

They see it as temporary money and will not count it

Good Luck

Brian