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Established Contributor
jadeite788
Posts: 510
Registered: ‎09-25-2009
0

IBR Question

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. 


Starting Score: 565
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Valued Contributor
JM-AM
Posts: 3,302
Registered: ‎06-09-2010
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Re: IBR Question

It does help your DTI.

 

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

Good Luck
May all your dreams and wishes become a reality!
Established Contributor
jadeite788
Posts: 510
Registered: ‎09-25-2009
0

Re: IBR Question

Thanks


Starting Score: 565
Current Experian Score: 634 (Lender pull)
Current Equifax Score: previous 668, 680 as of 11/12/13 lender pull
Current Transunion Score: previous 675,677 as of 09/23/13
Goal Score: 750

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Established Contributor
jadeite788
Posts: 510
Registered: ‎09-25-2009
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Re: IBR Question

@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.


Starting Score: 565
Current Experian Score: 634 (Lender pull)
Current Equifax Score: previous 668, 680 as of 11/12/13 lender pull
Current Transunion Score: previous 675,677 as of 09/23/13
Goal Score: 750

Take the FICO Fitness Challenge



Valued Contributor
JM-AM
Posts: 3,302
Registered: ‎06-09-2010
0

Re: IBR Question


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.


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.

Good Luck
May all your dreams and wishes become a reality!
Established Contributor
thankfulheart
Posts: 619
Registered: ‎09-26-2011
0

Re: IBR Question

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.

Starting Score: 10/1/2011 EQ 568 TU 593
Current Score: EQ 664 TU 700 EX 701 (FAKO)

Established Contributor
jordanmedical
Posts: 1,011
Registered: ‎04-08-2012
0

Re: IBR Question

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

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Starting Score: 492-TU04, 480-EX FICO V2, 467-EQ Beacon 5 (Via Mortgage PreQual March '12)
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Established Contributor
jadeite788
Posts: 510
Registered: ‎09-25-2009
0

Re: IBR Question


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.


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.


Starting Score: 565
Current Experian Score: 634 (Lender pull)
Current Equifax Score: previous 668, 680 as of 11/12/13 lender pull
Current Transunion Score: previous 675,677 as of 09/23/13
Goal Score: 750

Take the FICO Fitness Challenge



Established Contributor
jadeite788
Posts: 510
Registered: ‎09-25-2009
0

Re: IBR Question


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.


What is an ombudsman?


Starting Score: 565
Current Experian Score: 634 (Lender pull)
Current Equifax Score: previous 668, 680 as of 11/12/13 lender pull
Current Transunion Score: previous 675,677 as of 09/23/13
Goal Score: 750

Take the FICO Fitness Challenge




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