FHA Pre Approval Woes... NEED ADVICE

[Dstangel11]

First of all, Happy Independence Day! So I've been building my credit for a year now. I am looking to purchase a home in 2015. I will be going through FHA. I read on the Forum that you need to have at least a 620 to qualify for a FHA loan. My FICO finally hit 620 + across the board, so I decided to app to get any idea if I could get approved, and if not, what I needed to work on to ultimately get approved. Long story short, the LO reviewed my app, and told me that all my scores were not 620. I was a little prepared for that because I know mortgage lenders pull a different version. Then what he said next shocked me. He said my debt to income was too high. My base pay is 3700 monthly and my debt is about 700. From my calculations that way under 36%. But he said that he has to look at my student loans which are in deferment. He said the eventually they will come out of deferment and that will impact my DTI.

I owe about 90,000 in student loans all in deferment! From the sounds of it I will NEVER have a good DTI! This sounds so unfair! Is there a guideline regarding student loans when trying to be approved for an FHA loan? I feel so defeated! HELP! Thank you!

(Excuse typos IPhone 5)

[edcb]

But honestly...with 90k in student loans you're looking at a payment in excess of $1000/month - only made worse as they compound interest in deferment.  The end of deferment is inevitable.  Your real monthly debt, combined with student loans, is really in excess of $1,700/month.  That equates to half of your income.  The best way to handle this is simply to start making payments and pay down the debt.

[songsofexperience]

If your loans are  federal get on an IBR plan. I owe $220k and pay $270 a month under IBR. These loans will always be on IBR and in another 6 years the balance will be forgiven because I work for a nonprofit. You can consolidate and get on IB and still have them in deferment. Then you can show when they come out of deferment your payment will be X and not Y.

[Dstangel11]

@songsofexperience thank you for the recommendation. I work for a Title 1 school. Is there a loan forgiveness program for that? Thank you again!

[songsofexperience]

I'm pretty sure there's a version for teachers in Title 1 schools. Check out https://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service

even if there's no 10 year forgiveness, lots of states have some forgiveness amounts and also, under IBR, your payments are limited to a percentage of what you earn and loans are forgiven after 20 years (or maybe it's 25) so it's worth it just for that. If I didn't have IBR, I'd be paying about $1500+ a month. 

At this point, I'm not even paying enough to cover interest. They may as well just cancel them now!

The Ph.D. Was not worth it.

[mom22sonz]

i hear u songs! JD here! ugg