New student loan effect on scores/approval

[teton]

I have gone back to school this semester and will have another student loan account on my credit report. Will this be a major hit to my scores? My other student loans will go into deferment but I will be paying the interest during this time so that my balance on those doesn't increase. How might this affect the mortgage approval process? I was thinking about going FHA in about three months.

[ShanetheMortgageMan]

For most usually opening a new account can drop your scores a few points, for others it might not do anything.  You get them back within a few months of on time payments.  For FHA payments on student loans are included in the debt ratio if the payments begin within 12 months of closing, if that isn't the case then nothing to worry about there.

[Anonymous]

Shane --- what is the effect of accruing student loans during the mortgage underwriting process.  Right now I have about $12,000 in loans but am still in school.  The Spring semester is scheduled to begin next week and at Liberty University it is split into two sub-terms (01/17/2011-03/11/2011, and then eight weeks in late March-May).  I have a letter from the student loan company for my Underwriter as to what the repayment will be based on the current loan balance.  What happens if I take more classes this term and incur additional student loan debt.  When will it report to the credit bureas: as soon as my first class begins ... or when?  I don't have the requisite pre-approval letter necessary to submit an offer on the foreclosed home we've chosen and am right at 40% TDI ratio (with only the PITI and SL payments).  The increased student loan payment would presumably interfere with my TDI ratio and I certainly don't want to mess with that and blow the whole prospect.  On the other hand, I only have one semester of classes left if I take the planned overload and was preparing to graduate (summa **bleep** laude) in May of 2011.  Is it worth the delay in dropping my subterm B classes (Jan-Mar) and taking back up in the subterm D (Mar-May) to make sure the SL issue remains a non-issue???

[ShanetheMortgageMan]

If you incur more student loan debt then the letter from the student loan company needs to be updated with the current balance and state what it's expected payment is to be.  If you are looking to qualify, and the increased student loan debt would push your debt to income ratio too high to qualify for the mortgage, then my advice is to push off taking on more student loan debt.  However if you are going to land a better paying job after graduating in May of this year, the increase in it's income may offset the additional monthly payments from your increased student loan debt.  Personally, I'd worry graduating first and then look for a home afterwards.  No need to put it all on your plate at once.