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Frequent Contributor
Posts: 405
Registered: ‎08-13-2008
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How do I show my loans are deferred for 12+ months

Going for FHA loan but my nice loan lady says I need to prove to the underwriter that my loans will be deferred for 12 months after payments start. I have an option to renew after grace but there is no real way to prove it except printing out a general policy.

 

 For those in a similar situation what exactly did you do?


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Senior Contributor
Posts: 3,299
Registered: ‎04-22-2008

Re: How do I show my loans are deferred for 12+ months

Depending upon your loan it can be a problem.  Most student loan deferrments are somewhat conditional so the loan companies are sometimes hesitant to issue any official waiver of payment type document. hopefulyl someone else chimes in. 
Super Contributor
Posts: 6,624
Registered: ‎07-03-2007
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Re: How do I show my loans are deferred for 12+ months


mickie08 wrote:
Depending upon your loan it can be a problem.  
very much the bottom line right there.
 

 

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Established Contributor
Posts: 721
Registered: ‎03-15-2008
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Re: How do I show my loans are deferred for 12+ months


mickie08 wrote:
Depending upon your loan it can be a problem.  Most student loan deferrments are somewhat conditional so the loan companies are sometimes hesitant to issue any official waiver of payment type document. hopefulyl someone else chimes in. 

Dittoing mickie08.  

 

As I learned the hard way, in something not at all related to buying a home, student loan deferments can change at the drop of a hat.  In 2007 I was told that my loan deferment would be good for 2 years.  So when I planned my budget, I didn't plan on that payment.  I was devastated when they dropped the deferment on me, causing me to come up with an unknown amount at the drop of the hat to prevent my payment from going up.  

 

Even though the company says your deferment is good through 'X' time, they only mean "as long as you do what we want you to."

 

For example right now, because I took two classes in the spring semester, I'm in deferrment until 12/23/2010.  I will be taking 2 classes again this fall, which means my deferrment will hold.  However, I have no way to prove that my deferrment will last even until December of 2009, because while I have a letter stating it will last until 2010, I could drop 1 of my 2 classes, which will cause me to lose the deferrment beginning in August of 2009.  And at this point I don't even know what I'm taking this spring, so I could sign up for only 1 class, and then again lose the deferrment earlier than the company says I will.

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Senior Contributor
Posts: 3,299
Registered: ‎04-22-2008
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Re: How do I show my loans are deferred for 12+ months

Even in cases where you have a recorded deferral for a whole year like a hardship deferral there are 2 problems...

 

When they see a "hardship" deferral it will automatically send up a flag.

 

Also, those are good for 12 months generally from the day you post them.  the UW will want to see proof of the deferral for preliminary approval.  At close it will no longer be good for 12 months.  On top of that, there are almost always escape clauses where they can back out and charge full payment.


The wise advice in any case is that if you can not afford a house with the payment now, you usually can not afford the house.  In the case of someone who is close to graduation and expecting a pay increase due to graduation, there is the issue of securing a job and getting tied down into a house not knowing where you are going to land.  In any case, usually a bad idea (not always of course...)

Contributor
Posts: 102
Registered: ‎04-07-2009
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Re: How do I show my loans are deferred for 12+ months

I personally think this requirement is stupid.

 

You want me to prove that I don't have to make payments on a note for twelve months even though we are talking about you giving me a loan for thirty years.

 

Where's the logic in that?

New Member
Posts: 4
Registered: ‎04-12-2007
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Re: How do I show my loans are deferred for 12+ months

I'm a teacher and my Perkins loans have been in deferment for the past 4 years under the teacher loan forgiveness program. Each year, a portion of my loan is forgiven and the remaining balance is put in deferment for 12 months. My Stafford loans go into deferment in my 4th year of teaching as I will have only one more year to teach before those also get forgiven. Pretty much the only way I can think of to get this is if you qualify for some kind of loan forgiveness at some point.
Senior Contributor
Posts: 3,299
Registered: ‎04-22-2008
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Re: How do I show my loans are deferred for 12+ months

Even in a situation such as yours, there are probably clauses that kick the deferrment out (like if you quit teaching and possible if you are in default on any other federal debts, etc)  So it is always hard to show hard proof of no student loan payments.
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