My loan is in the process of being underwritten through prime lending and my LO called and said they were having an issue with my IBR. I specifically had contacted my servicing company and they provided documentation that my IBR payment is $0.00 until November of this year, and will continue to be $0.00 upon renewal, for a total of 15 months worth of $0.00 payment documentation. The LO is going to talk to underwriting tomorrow, but I don't understand how this is any different from having a 12 month deferment. I am in repayment and that payment is not changing for the next 15 months.
From the sound of it, they really don't like that the IBR is at $0.00 and are stating they would need to do a 1% assumption on the monthly payment for D:I. My loan officer called this morning and asked me to apply for a deferment (which I did) and stated that if that didn't work we'd just roll over into a conventional loan.
underwriters mostly dont understand ibr because it is not in the guidelines.
let us know what they say
^^^Exactly. Most UWs wont let $0 fly for IBR (regardless of how long it will be $0 for), and they will want to see an actual payment amount. We have our borrowers contact the student loan companies and ask for what their payment would be if they weren't in IBR and UW usually accepts it.
This is an interesting post b/c I will be going thru this situation eventually too. My bank, in the past, has counted my DTI to include a full payment for my loan ($600+/month). I've not gotten past hearing that and wondered how my IBR would play into getting a mortgage or if I was ruled out all together b/c my payment is so high (even though I pay 0 now and for the next 12 months). Interested in how the process works!
Starting Score: 645 Current Score: 713! Goal Score: 700
Thankfully I qualified for a deferment, so I should be good to go. If your IBR is at 0, you're going to have problems from the look of it. I think it's an important topic to bring up to your loan officer early on so they can pass it along to the processor and underwriting in advance.
Congrats on the deferrment...I just got an email the other day that said I was due to update my payment info. I guess it came at a good time. I knew I would have issues with the $600/month payment plan and my DTI but I didn't think the $0 payment plan would hurt, but I guess I was wrong. In the next day or so I will look into all my payment options and will definately keep my loan officer informed of the payment on my loan status to see if I either need to change plans or get deferrment.
Starting Score: 645 Current Score: 713! Goal Score: 700
"After September 14, 2015, we will be counting ALL Student Loan payments to qualify you, even if the current payment is deferred or set to zero. We must establish a payment, or count 2% of the balance."
Sorry sometimes i need things spelled out specifically so i understand. When you say "counting ALL Student Loan Payments...we must establish a payment, or count 2% of the balance" in my example: my normal payment would be a bit over $600/month. My IBR payment is $0. So they would take the $600/month paymemt correct? Or lets say i changed the payment plan to pay $200/month instead of $600. Would they accept the $200 or the $600? Would just kinda like to know what id be walking into. Thx!
Starting Score: 645 Current Score: 713! Goal Score: 700
@peme6040 wrote: Sorry sometimes i need things spelled out specifically so i understand. When you say "counting ALL Student Loan Payments...we must establish a payment, or count 2% of the balance" in my example: my normal payment would be a bit over $600/month. My IBR payment is $0. So they would take the $600/month paymemt correct? Or lets say i changed the payment plan to pay $200/month instead of $600. Would they accept the $200 or the $600? Would just kinda like to know what id be walking into. Thx!
Correct. According to my loan officer, your payment cannot be zero. They'll use whatever current payment being made ... or 2% if none.
