02-28-2013 08:23 AM
Dh and I currently are in student loan repayment under the income based plan. This means we pay 0 a month because of our income and family size. Will this hurt us getting a mortgage? I've read thet might try to use the standard repayment of $1500 a month for our dti! There is no way we would ever hit that payment! Even if our income triples we won't pay that much because of our large family size!
any experience out there?
02-28-2013 08:43 AM
Why don't you ask the potential lender you are considering. Mine is only considering what I pay monthly only on the IBR. That is it.
03-01-2013 08:02 PM
Its not a simple question with a yes or no answer...
Some Lenders will just consider your payment, while others will not.
03-02-2013 07:14 AM
I am in IBR and I purchased my home April 2012. 2 years prior to my app I reached out to some lenders and they seemed pretty uneducated about IBR and all of them basically wanted to treat it as a deferrment and either wanted proof that I was going to pay the $0 for more than 12 months (which is probably near impossible) or use my standard payment which was $950. I didn't want to deal with the headache so I didn't apply until my income increased and the payment reflected on my credit reports increased to a more believeable payment plan (now its $250).
When I applied the lender only confirmed that I was paying $250 per month. She did not ask for any further documentation or payment plan information. I'm also glad I waited because if I had purchased with $0 payment I probably would have purchased a home with larger payments that would have been more difficult to manage with my increased IBR payment. I know that's not what you want to hear. Been there, done that. But I will tell you that my approval process was very easy compared to some of the other experiences I've read when applicants have $0 payments.
Best of luck to you!
03-02-2013 07:55 AM
Because of our family size of 7, even if we tripled our income to 180k (which won't happen!), our payments would only be $300.
one lender I talked to said to stop putting money into my husbands 401k because that would bring our agi up to where we would owe $10 on the ibr payment.
I know this program isn't new anymore, so I'm hoping that lenders will become more informed since this is a legitimate payment option!
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