Qualifying For VA Loans With Student Loan Debts
Student Loan Debt is one of the biggest obstacles for homebuyers when it comes to qualifying for a mortgage. This holds especially true for disabled veterans with limited income. With the President signing this executive order eliminating student loan debts for disabled veterans, it will make qualifying for a VA Loan substantially easier.
Here are the VA Guidelines on Student Loans:
- Deferred student loans that have been deferred longer than 12 months is exempt from debt to income calculations on VA Loans
- Borrowers can use fully amortized student loan payments that are reporting on all three credit bureaus
If the student loan is non-deferred or in an Income-Based Repayment (IBR) Plan, then the following formula is used:
- Take 5% of the outstanding student loan balance
- Take that figure and divide it by 12 months
- The resulting figure will be the hypothetical monthly student loan payment used to qualify debt to income ratios
For more information about this article and/or other mortgage-related topics, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at firstname.lastname@example.org.