@Anonymous wrote:
@Anonymous wrote:
So this new rule totally screwed us over today. our loan officer didnt know about it and we got our contract signed yesterday, had we known in advance we would have done it on sunday.
Does anyone know if we put 1 of our many student loans into repayment, could that then be used as the number for the debt to ratio? Our loans are in defferment, and we will be on IBR. However our servicer which is the William D. Ford program, they will not issue a statement estimating our future payment. They offered a 3 way conference call but nothing in writing. So i am wondering if we put one of our loans into repayment, can that be used as the required monthly payment
Yes, look into graduated repayment. Starts off with a lower payment and gradually increases. For the loan's sake, you can use the low starting payment. If IBR will give you a payment other than 0, that will work too.
Whats crazy is that USDA is totally different or FHA has grey area . USDA handbook is they need a loan that has fixed payments that do not change. I really thought FHA would follow this dumb unrealistic track but as for now they seem to not do that which is good.
Here it is on page 233 of the USDA HB-1-3555 handbook.
Student loans. Lenders must include the greater of one percent of the outstanding loan balance or the verified fixed payment as reflected on the credit report. Exception: Monthly payment amounts listed on the credit report, which are less than one percent of the outstanding balance may be used when evidence from the loan servicer is obtained indicating; 1)the applicant is on a fixed repayment plan not subject to change under the terms of the current agreement and 2) and the monthly payment amount due. Fixed payments have a monthly amount that is not subject to change through the fixed repayment time frame. Income Based Repayment (IBR) plans, graduated plans, adjustable rates, interest only and deferred plans are examples of repayment plans that are subject to change and do not qualify for the exception. No additional documentation is required if a credit report is obtained and the lender can confirm the payment represented is a fixed payment as noted in this paragraph.
FHA's rule states
4) Calculation of Monthly ObligationThe Mortgagee must use the actual monthly payment to be paid on a deferred liability, whenever available.If the actual monthly payment is not available for installment debt, the Mortgagee must utilize the terms of the debt or 5 percent of the outstanding balance to establish the monthly payment.For a student loan, if the actual monthly payment is zero or is not available, the Mortgagee must utilize 2 percent of the outstanding balance to establish the monthly payment.
So it seems as of now FHA is still more lenient if you can get the cheapest payment possible that is greater than zero you are ok. Which is dumb as you can get a 1 dollar payment and still qualify.
Bottom line is neither wants to see deferred or a zero IBR payment.
Equifax - 628, Experian -627, Transunion- 654 In the garden until 01/01/2019
