Do you want to get pre-approved to purchase a house using an FHA loan but having trouble because of how your student loan payments are calculated? Are your a first time home buyer having trouble because the lender wants to use 1% of your student loan debt? In todays video, I bring in mortgage expert, Josh Lewis of Buywise Mortgage to discuss the most recent FHA update that now allows FHA loans to use the IBR payment when calculating your debt to income ratio.
To connect with Josh Lewis – firstname.lastname@example.org – https://www.youtube.com/channel/UCvb_…
➡FHA Student Loan Guidelines
For outstanding Student Loans, regardless of payment status, the Mortgagee must use:
• the payment amount reported on the credit report or the actual
documented payment, when the payment amount is above zero; or
• 0.5 percent of the outstanding loan balance, when the monthly payment
reported on the Borrower’s credit report is zero.
➡VA Loan with Student Loan Guidelines
VA’s approach to factoring in student loan payments is very similar to how they approach other qualifying guidelines. Qualifying for a VA loan with student loans will depend on two things, is there a payment? Or is there not a payment?
How to Calculate a Student Loan Payment
DEFERRAL EXCLUSION: If you (the Veteran) or other borrower provides written evidence that the student loan debt will be deferred at least 12 months beyond the date of closing, a monthly payment does not need to be considered.
NO PAYMENT FORMULA: If your student loan is in repayment or scheduled to begin within 12 months from the closing date of your VA loan, the lender must consider the anticipated monthly obligation using the following formula.
No Payment Formula: Student Loan Balance x 5% / 12
➡Fannie Mae Student Loan Guidelines
Fannie Mae student loan guidelines fall into two categories.
Payment Plan (even if the income-based payment is $0)
No Repayment Plan (deferred, forbearance)
Repayment Plan: If a monthly student loan payment is reported on the credit report, the underwriter may use that amount for qualifying purposes. If your credit report does not reflect the correct monthly payment, the underwriter may use the monthly payment that is on the student loan documentation (the most recent student loan statement).
If the credit report does not provide a monthly payment for the student loan, or if the credit report shows $0 as the monthly payment, the underwriter must determine the qualifying monthly payment using one of the options below.
If you are on an income-driven payment plan, you can provide the underwriter with student loan documentation from your servicer to verify the actual monthly payment is $0. The underwriter may then qualify you with a $0 payment.
No Repayment Plan: For deferred loans or loans in forbearance, the lender may calculate a payment equal to 1% of the outstanding student loan balance (even if this amount is lower than the actual fully amortizing payment), or a fully amortizing payment using the documented loan repayment terms.
➜Freddie Mac Student Loan Guidelines
If the monthly payment amount is greater than zero, use the monthly payment amount reported on the credit report or other file documentation, or
If the monthly payment amount reported on the credit report is zero ($0.00), use 0.5% of the outstanding loan balance, as reported on the credit report
Do you have additional questions about student loans and buying a home or doing a refinance and want to be connected with a mortgage professional?
Connect with me 👇
Jeb Smith (huntington beach Realtor/orange county real estate)
Coldwell Banker Realty
➡I N S T A G R A M ➳ https://www.instagram.com/jebsmith
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