FHA changing guidelines on deferred student loans - 6/15/15

[theheater30]

I tried looking through this thread for the answer to my question but wasn't able to find it. Can I take my loan out of deferrment and do an income based payment so the amount I pay monthly is lower than the projected payment? I am still in school but I would be willing to make some payments to get that monthly amount down.

[betakappa19]

My IBR payment is $7.55. It's about to be 0. I've been in repayment for 4 years. So now that it's $0 they are going to claculate my DTI at 2% of the loan? That seems crazy!  

[Anonymous]

Yes, 2% this almost ended my loan process. My statement said approximate payment so they would not except it and calculated 2% Ofthe loan after a month past my closing date they were able to get an exception to be above DTI and still get approved. We close 6 weeks ago.

[Anonymous]

i have found it depends on your lender. My husband had nelnet his statement still listed an actual payment amount do he didn't have issues even though he was in deferment. He called them and they sent him a statement of what his sctual payment would be. I have Great Lakes their statement says approximate. Not all lenders will except an income based repayment.

[Anonymous]

May I ask what lender did you go through? 

I am in the same boat. 

I have 150k in student loans from graduate work. I am on an income driven plan, PAYE. I am also 3.5 years into Public Service Loan Forgiveness, where all of my loans will be forgiven in 6.5 years. My $100 payment reports on my credit. 

My monthly payments are $100, my standard payment would be over $1000...

Every and I mean every lender is telling us that they will have to go with the 1% or the standard since my income based plan will not fully ammortize the loan. Obviously this puts my DTI off the charts. 

Im running out of hope. 

Any advise would be of help. 

Edited to add: We are looking to go conventional, I have 20% to put down. If FHA is our only option, we will go that route. 

[GirlMelanie89]

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@Anonymous wrote:

May I ask what lender did you go through? 

I am in the same boat. 

I have 150k in student loans from graduate work. I am on an income driven plan, PAYE. I am also 3.5 years into Public Service Loan Forgiveness, where all of my loans will be forgiven in 6.5 years. My $100 payment reports on my credit. 

My monthly payments are $100, my standard payment would be over $1000...

Every and I mean every lender is telling us that they will have to go with the 1% or the standard since my income based plan will not fully ammortize the loan. Obviously this puts my DTI off the charts. 

Im running out of hope. 

Any advise would be of help. 

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That makes no sense, since your loans will be forgiven in 3 years anyway. PM ShaneTheMortgageGuy and see if he can find you a lender that will accept your income based payments. That is absurd that this could affect your ability to purchase a home.

[Anonymous]

They will be forgiven in 6.5 years, but either way I obviously agree! 

I dont get why they cant use Income Based Plans. Even if I start to make more money and my student loan payment gets higher, its always 10% of my income. So Ill just have more money to put toward my mortgage. 

I have talked to 10 lenders in the area. One broker who talked to all of his lenders. I was the National Mortgage Lending Morning Meeting Topic for one National Bank, no resolution yet. 

Thank you for the suggestion I will PM them. 

[GirlMelanie89]

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@Anonymous wrote:

They will be forgiven in 6.5 years, but either way I obviously agree! 

I dont get why they cant use Income Based Plans. Even if I start to make more money and my student loan payment gets higher, its always 10% of my income. So Ill just have more money to put toward my mortgage. 

I have talked to 10 lenders in the area. One broker who talked to all of his lenders. I was the National Mortgage Lending Morning Meeting Topic for one National Bank, no resolution yet. 

Thank you for the suggestion I will PM them. 

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No problem! Maybe he can help. I'll be using him with my mortgage app. Also, are you going FHA or conventional? I'll be going IBR as well and will take my loans out of deferment next month in order to ensure that I have an exact dollar figure, rather than a letter showing an estimated amount. I am going to go FHA, so this info is very helpful so I can prepare.

[Anonymous]

We are trying to go conventional if possible since we have 20% to put down. But if we have to we will go FHA. I have killer credit after consolidating my credit card debt, so it would suck to be penalized over student loans and have to still pay pmi and higher closing costs.

[GirlMelanie89]

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@Anonymous wrote:
We are trying to go conventional if possible since we have 20% to put down. But if we have to we will go FHA. I have killer credit after consolidating my credit card debt, so it would suck to be penalized over student loans and have to still pay pmi and higher closing costs.

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Hmmm...that's the issue...the conventional loan. What about this scenario:

Take an FHA loan now, put only the 3.5% down (or all 20%--your choice), and refinance in 3 years, once your student loans are forgiven. It would save you alot more money to still seek getting a house now (since financially you're able to) as opposed to throwing money out the window to rent a place. Plus, it you ended up only putting down 3.5% on an FHA, you could use the rest of the money for housing decor, updates, remodeling, paying down/ off other debt, etc.

UPDATE: Are you a first time home buyer? If so, have you considered home buying programs offered by Credit Unions? For instance Navy Federal has one with no PMI, but the interest rate is higher.  But when I was playing with some numbers, the monthly payment was still cheaper without the PMI.

What are your thoughts on that?