Reply
New Contributor
Melissalyn17
Posts: 56
Registered: ‎05-08-2012
0

IBR and USDA Guaranteed

We are going to build a house and are attempting to go through their preferred lender. We have a pre-approval from another lender. Their lender is a little more conservative. The problem she has just now brought up, is that she is not sure if my husbands IBR (student loan) payments will be counted (or if they would count the higher payment, which is WAY higher) since you have to renew it every 12 months. Does anyone know if USDA would use IBR to calculate DTI?

Valued Contributor
GoodCredBen
Posts: 1,533
Registered: ‎10-25-2011
0

Re: IBR and USDA Guaranteed

I believe they will. 

 

I would wait for someone who has IBR though....

 

They did calculate my student loans into my DTI though.... 

----- IF you find my post helpful, Select the star in the KUDOS button! :smileyhappy:
Starting Score: 512 10/2011 Current Score: EQ: 686 | TU: 689 | EX: 661
In My Wallet: SFCU Visa: $10,000 | UECU Visa: $5000 | WellsFargo: $3900 | Cap1 QS: $3500 | Cap1 QS: $3000 | Cap1 AU: $1750
Gardening Since: 6/1/2014
May the debt elimination begin! 9680/27150
New Contributor
Melissalyn17
Posts: 56
Registered: ‎05-08-2012
0

Re: IBR and USDA Guaranteed


FairCredBen wrote:

I believe they will. 

 

I would wait for someone who has IBR though....

 

They did calculate my student loans into my DTI though.... 


Thanks, I know they calculate student loans into DTI, he took it out of deferment to start IBR because he needed to show a payment amount for the loans so we could calculate DTI. We were under the impression IBR would suffice, but now the LO is saying USDA might want to use the regular payment amount, which we will never actually be paying since he is enrolled in IBR and would greatly decrease the amount of loan we qualify for.

Valued Contributor
GoodCredBen
Posts: 1,533
Registered: ‎10-25-2011
0

Re: IBR and USDA Guaranteed

This is something i tell everyone, buy in what the bank is going to give you... Don't think because you can't get more, that you can't buy a home... Because the bank is willing to give what they feel you can comfortably afford.....

 

I was pre-approved for 485,000$ ..... The home I am purchasing is 153,000 ..... There should be no reason I can't make my bills unless something catastrophic happens.

----- IF you find my post helpful, Select the star in the KUDOS button! :smileyhappy:
Starting Score: 512 10/2011 Current Score: EQ: 686 | TU: 689 | EX: 661
In My Wallet: SFCU Visa: $10,000 | UECU Visa: $5000 | WellsFargo: $3900 | Cap1 QS: $3500 | Cap1 QS: $3000 | Cap1 AU: $1750
Gardening Since: 6/1/2014
May the debt elimination begin! 9680/27150
New Contributor
Melissalyn17
Posts: 56
Registered: ‎05-08-2012
0

Re: IBR and USDA Guaranteed


FairCredBen wrote:

This is something i tell everyone, buy in what the bank is going to give you... Don't think because you can't get more, that you can't buy a home... Because the bank is willing to give what they feel you can comfortably afford.....

 

I was pre-approved for 485,000$ ..... The home I am purchasing is 153,000 ..... There should be no reason I can't make my bills unless something catastrophic happens.


We were preapproved by another bank for well over what we are trying to buy a house for. We are trying to build a house and we have a contract. We stayed within our approval. We are now trying to go through their perfered lender, she is thinking that USDA (not the lender) will not want to go by the IBR payments. If they go by the regular payment amounts it is more than 3x the IBR payment amount (dh has $85,000 in student loans), so it takes us well below the amount of the house we are trying to build. So what I was wondering is what USDA will actually go by, just so I know if the other LO will run into the same problem with USDA even if the lender may be willing to lend us the amount, USDA has to approve it.

Valued Member
languedoctor
Posts: 41
Registered: ‎04-23-2012
0

Re: IBR and USDA Guaranteed

[ Edited ]

This is one of the biggest problems I've had in my current mortgage process.

 

Short version: yes, I'm using IBR payments for DTI, not standard 10yr payments.

 

Long version: I forgot to update my income with the DoE. I know, stupid. Do not let this happen, because DirectLoans will change your monthly payment with the credit bureaus. And it'll take 10 days or so for them to process updated income. And then they'll refuse to update the credit bureaus outside the regular monthly update.

 

I received a letter from DoE concerning my newly updated IBR payment, but the letter shows 12 months of x, and then 108 payments of (way, way more than x). My mortgage broker refused to submit that letter to underwriting.

 

We had to do a conference call with me, DirectLoans, and Kroll Factual Data (the service my broker uses for tri-merge reports).

 

Then, after confirming the amount of my IBR payments, Kroll manually changed the monthly payment amount on my credit report to reflect the IBR payment.

 

My broker then wrote up the app with an updated report from Kroll, and submitted that to underwriting. To the best of my knowledge, there is no indication on my mortgage app or credit report which repayment plan I have. There's just the IBR payment on my credit report, and on the section of my app with my broker's DTI calculations.

 

If my experience is any guide, it should work. Just don't make it harder than it needs to be (like I did).


Starting Score (4/2012): 593 EQ
Current Score (6/2012): 666 EQ, 661 TU04, 688 EX
Goal Score: 750


Take the FICO Fitness Challenge
New Contributor
Melissalyn17
Posts: 56
Registered: ‎05-08-2012
0

Re: IBR and USDA Guaranteed


languedoctor wrote:

This is one of the biggest problems I've had in my current mortgage process.

 

Short version: yes, I'm using IBR payments for DTI, not standard 10yr payments.

 

Long version: I forgot to update my income with the DoE. I know, stupid. Do not let this happen, because DirectLoans will change your monthly payment with the credit bureaus. And it'll take 10 days or so for them to process updated income. And then they'll refuse to update the credit bureaus outside the regular monthly update.

 

I received a letter from DoE concerning my newly updated IBR payment, but the letter shows 12 months of x, and then 108 payments of (way, way more than x). My mortgage broker refused to submit that letter to underwriting.

 

We had to do a conference call with me, DirectLoans, and Kroll Factual Data (the service my broker uses for tri-merge reports).

 

Then, after confirming the amount of my IBR payments, Kroll manually changed the monthly payment amount on my credit report to reflect the IBR payment.

 

My broker then wrote up the app with an updated report from Kroll, and submitted that to underwriting. To the best of my knowledge, there is no indication on my mortgage app or credit report which repayment plan I have. There's just the IBR payment on my credit report, and on the section of my app with my broker's DTI calculations.

 

If my experience is any guide, it should work. Just don't make it harder than it needs to be (like I did).


Thank you so much for your reply.

 

We have the same statement showing 12 month payments at a certain amount and then the rest at the higher amount. So basically we have to try to get AES to update the credit report asap showing the actual payment? We won't be closing for at least 4 months but this LO wants to send the pre-approval through USDA within 15 days so we can start building. So she wants everything in place ASAP.

 

 

Regular Contributor
jules0580
Posts: 155
Registered: ‎05-13-2012
0

Re: IBR and USDA Guaranteed

You should call USDA and find out, or find out from the lender exactly what USDA states,, my loans are in defferment because Im in school but the LO told me I had to count them for USDA,, for USDA they use the full payment doesnt matter how long its deffered for but I dont know what IBR is so that could be different? But from what I looked up when I was dealing with that it was something like they take a percentage of the full amount (in your case the 85000) and thats what they take as your full payment per month.

New Contributor
Melissalyn17
Posts: 56
Registered: ‎05-08-2012
0

Re: IBR and USDA Guaranteed


jules0580 wrote:

You should call USDA and find out, or find out from the lender exactly what USDA states,, my loans are in defferment because Im in school but the LO told me I had to count them for USDA,, for USDA they use the full payment doesnt matter how long its deffered for but I dont know what IBR is so that could be different? But from what I looked up when I was dealing with that it was something like they take a percentage of the full amount (in your case the 85000) and thats what they take as your full payment per month.


From my understanding they usually only calculate a percentage of the full amount if no payment information is available. We have all of our payment information available, it's just showing the IBR (income based repayment) payment amount.

Frequent Contributor
bbb3601
Posts: 328
Registered: ‎01-26-2012
0

Re: IBR and USDA Guaranteed

My IBR updaed to all 3 CB'S  within 45 days.  Report broker pulled had old payments, but he went to bat I still provided the letter and it was never an issue. YMMV

NFCU Cash Rewards 20,000,NFCU Plat 17,000, NavCheck 15,000, USAA Cash 4,000, USSA Rate Adv 2,000, USAA AMEX 3,500, Freedom 2,000, Capital One 2,000, Barclay's Apple 1,500, Barclay's Ring 1500, Various Store Cards.





myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}