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On my credit report there is no mention of any program (IBR or otherwise), it just states Great Lakes installment loan, the total balance, and has a monthly payment listed at $400ish
@Anne1208 wrote:On my credit report there is no mention of any program (IBR or otherwise), it just states Great Lakes installment loan, the total balance, and has a monthly payment listed at $400ish
Fannie takes the greater of 1% of the balance or your actual payment. So if your total balance is less than $40,000, the $400 will be used.
hey dpeezy,
that's not necessarily true. I owe 35k in student loans and my monthly payment is $212....this was not a issue and it the payment used in our disclosures to calculated DTI.
and OP, my apologies, but in my earlier posts, I was thinking FHA and not Fannie Mae.
@frugalQ wrote:hey dpeezy,
that's not necessarily true. I owe 35k in student loans and my monthly payment is $212....this was not a issue and it the payment used in our disclosures to calculated DTI.
and OP, my apologies, but in my earlier posts, I was thinking FHA and not Fannie Mae.
Correct, as long as the student loan will fully amortize with no payment adjustments. If there will be any payment adjustments, the greater of 1% or the actual payment must be used. This change is less than a year old. From FNMA:
Student Loans
For all student loans, whether deferred, in forbearance, or in repayment (not deferred), the lender must use the greater of the following to determine the monthly payment to be used as the borrower’s recurring monthly debt obligation:
1% of the outstanding balance; or
the actual documented payment (documented in the credit report, in documentation obtained from the student loan lender, or in documentation supplied by the borrower).
If the payment currently being made cannot be documented or verified, 1% of the outstanding balance must be used.
Exception: If the actual documented payment is less than 1% of the outstanding balance and it will fully amortize the loan with no payment adjustments, the lender may use the lower, fully-amortizing monthly payment to qualify the borrower.
It's okay!
Yeah my loans are WELL over $40k so I am assumign the 1800/mo figure. Which again, is totally fine if they use a backend of 45%, just iffy if they use a backend max of 36%, bc our backend DTI with the "Fake" 1800/mo payment is like, 36.5-37%.
I wish they just went by my actual payment!! With an ACTUAL DTI of 18% front end and 24% back end, the house we want is comfortably within our means. But they don't go by that! oh well.
My $400 does NOT fully amortize the loan (as soon as we get in a dang house and I stop saving so much oney for the house I will pay extra to at least cover interest, but I digress...)
So, it is the 1%.
@Anne1208 wrote:It's okay!
Yeah my loans are WELL over $40k so I am assumign the 1800/mo figure. Which again, is totally fine if they use a backend of 45%, just iffy if they use a backend max of 36%, bc our backend DTI with the "Fake" 1800/mo payment is like, 36.5-37%.
I wish they just went by my actual payment!! With an ACTUAL DTI of 18% front end and 24% back end, the house we want is comfortably within our means. But they don't go by that! oh well.
Hey Anne,
As frugal was explaining, those "hard numbers" in the matrix above are only if you do not get approved by automated underwriting. If you get an AUS approval, you do not need to use the matrix.
Okay, great, thanks!
So somebody already said they don't know what the algorithm is that is used in Aitomatic underwriting, so i suppose there is no way to know for sure if we will get approved through AU until we do it? How often are people in manual instead of AU, particularly where mortgage score is in the 660 range?
We have another 7 months or so before we would want to try to get approved, so hopefully my husband's mortgage score goes up by then and it's a nonissue, but if it doesn't I like to know what our limitations are.
@Anne1208 wrote:Okay, great, thanks!
So somebody already said they don't know what the algorithm is that is used in Aitomatic underwriting, so i suppose there is no way to know for sure if we will get approved through AU until we do it? How often are people in manual instead of AU, particularly where mortgage score is in the 660 range?
We have another 7 months or so before we would want to try to get approved, so hopefully my husband's mortgage score goes up by then and it's a nonissue, but if it doesn't I like to know what our limitations are.
AUS takes into consideration credit, income, assets, and debts for sure. It's really hard to see without seeing your entire file, but if you continue to improve your credit score your chances will only get better .