Mortgage With Deferred Student Loans And High DTI
Most borrowers and loan officers do not realize that there are alternative monthly student loan payments that can be used with qualifying for a mortgage with deferred with student loans instead of the 1.0% of the balance.
- IBR does no longer count on FHA and USDA Loans
- All deferred student loans need to be accountable for with regards to the monthly payment
Borrowers who work for the government and qualify for student loan forgiveness programs still need their student loan balances calculated for debt to income calculations.
1.0% Of Student Loan Balance Monthly Payment Versus Amortized Payment
Here is how borrowers can get a lower monthly student loan payment amount for DTI Calculations instead of the 1.0% of the balance:
Contact Student Loan Provider:
- State you are applying for a mortgage
- Need fully amortized monthly payment amount over an extended payment plan
- Normally that amount turns out to be 0.50% of the student loan balance
- The extended term is normally 25 years
- Borrowers do not need to change their student loan plans
Borrowers just need a written hypothetical statement on what the monthly fully amortized payment will be on an extended payment plan.
VA Mortgage With Deferred Student Loans
The only mortgage loan program that exempts monthly amortized payments on student loans are VA Loans.
- VA exempts monthly student loan payments on student loans that have been deferred for 12 or more months
- Veteran borrowers with large outstanding student loan debt are in luck
- Here is how The U.S. Department Of Veteran Affairs allows non-deferred student loans to be calculated:
- Take 5.0% of the outstanding student loan balance
- Divide that figure by 12 months
- That figure can be used as a hypothetical monthly student loan debt
Home Buyers having issues qualifying for a mortgage with deferred student loans, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at email@example.com. We are available 7 days a week, evenings, weekends, and holidays.