Mortgage Loans

[jadeite788]

Today i just found out that since I am a public service employee I qualify for the Income-Based Repayment Plan for my student loans.  I was told my payments would go from $655 a month to $117 a month only if I waive my 6 month grace period, along with that once I make 120 on-time payments my balance on my loan is forgiven.  Please keep in mind the LO already ran my credit and has my income, etc.  However she preapproved me, but has not given me a preapproval letter as of yet.  How will this effect my debt to income ratio.  My loan balance will stay the same, just that my payments are lowered.  Would this help me get a larger loan amount or no.  I am concerned about the underwriter. 

[JM-AM]

It does help your DTI.

How much the balance is does not play into your DTI. It is the monthly payment that is considered.

[jadeite788]

Thanks

[jadeite788]

@JM Got an update from the LO.  She states that as soon as I get my IBR letter then she can preapprove me for an $1200/mo. mortgage instead of the $800.  I am going to call U.S. Dept of Education, but do you know how long it would take to get a letter.

[JM-AM]

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jadeite788 wrote:

@JM Got an update from the LO.  She states that as soon as I get my IBR letter then she can preapprove me for an $1200/mo. mortgage instead of the $800.  I am going to call U.S. Dept of Education, but do you know how long it would take to get a letter.

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I am unsure, see if there is something on a website you may be able to print for verification. It should be enough to start the process until you get the formal letter stating your new loan terms. They should be able to pre approve with the condition of updated loan terms anyway, so you can at least start the process.

[thankfulheart]

I consolidated and switched to IBR during my loan process and it was a headache as the loan processor required the actual credit report to show the payment amounts; the letter from NelNet would NOT suffice for the UW.  It took MONTHS to get it all done, but in the end, DTI was good and everything was fine.  I had to reach out to the ombudsman before it was over with, so I would definitely stay on top of them to get the CRAs updated correctly and promptly.

[jordanmedical]

I am in the same position, my credit report doesn't reflect the same payments as my IBR.

[jadeite788]

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thankfulheart wrote:

I consolidated and switched to IBR during my loan process and it was a headache as the loan processor required the actual credit report to show the payment amounts; the letter from NelNet would NOT suffice for the UW.  It took MONTHS to get it all done, but in the end, DTI was good and everything was fine.  I had to reach out to the ombudsman before it was over with, so I would definitely stay on top of them to get the CRAs updated correctly and promptly.

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I don't have NelNet, my loans are from U.S. Department of Education, and that is what is stated on my credit report.  My loans are consolidated as well.  My LO already stated this is okay.  Maybe that is the difference.

[jadeite788]

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thankfulheart wrote:

I consolidated and switched to IBR during my loan process and it was a headache as the loan processor required the actual credit report to show the payment amounts; the letter from NelNet would NOT suffice for the UW.  It took MONTHS to get it all done, but in the end, DTI was good and everything was fine.  I had to reach out to the ombudsman before it was over with, so I would definitely stay on top of them to get the CRAs updated correctly and promptly.

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What is an ombudsman?