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deferred student loans

Valued Member

deferred student loans

does anyone have any personal insight into how the usda or a LO looks at deferred student loans?


Starting Score: 674 8/2010
Current Score: Your TransUnion FICO® score:
703
On November 17, 2012

Goal Score: 720+


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11 REPLIES
Established Member

Re: deferred student loans

I am currently building and my LO did not have a problem with my deferred student loans.

She did request a copy of my transcripts as I am currently obtaining my MBA and stated that they needed to be defered one full year after closing, then they would not be added as debt into my picture.  If the deferment end date was within one year, then she would have to include it. 

 

 

Hope this helps. 

Re: deferred student loans

I can't speak to USDA, but this is what my mortgage guy -- I went for preapproval, even though I won't buy until 2013 -- told me:

FHA: Deferred loans aren't considered as part of your DTI

 

Conventional loans: They'll contact the loan servicer and see what the anticipated payment will be, then use that to calculate the DTI.

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Regular Contributor

Re: deferred student loans


Upgraded wrote:

I am currently building and my LO did not have a problem with my deferred student loans.

She did request a copy of my transcripts as I am currently obtaining my MBA and stated that they needed to be defered one full year after closing, then they would not be added as debt into my picture.  If the deferment end date was within one year, then she would have to include it. 

 

 

Hope this helps. 


This minus the transcripts part.

Starting Scores:TU/513 EQ/484 EXP/513 3/2012 (lender pull)
Current Scores:TU/681 EQ/637 EXP/613 11/2012 (lender pull)
Goal:700 across the board
Valued Member

Re: deferred student loans

Well this is based on my husband and I experience this past August. We both completed school this year. We were orignally going for an FHA and apparently, they DO look at the student loans for to DTI. It was then led us to switch to USDA. Now as for USDA, they must be deferred for one full year so as to not include it into the DTI.

 

However, if your sitatuation is similar to ours, we completed school, but when our credit was pulled back in May, the monthly payments were not reflected in the report at that time. We were both having a little trouble obtaining the monthly payments for each loan from the US Dept of Education. What happens is, IF you cannot find out what you will be paying monthly on your student loans, then they will take 1% from each loan and calculate the monthly payment from there. That was going to cause issues as for each loan, our monthly payments were coming up extremely high causing our DTI to sky rocket.

 

We FINALLY were able to obtain monthly payments that were indeed reasonable and did not cause our DTI to go over. But again if you're loans are deferred for 12 months, then there should be no issue with the USDA loan.

 

GOOD LUCK!!

Valued Member

Re: deferred student loans

Someone can correct me if I am wrong.......but to my knowledge FHA is the ONLY type of mortgage loan that will exclude student loans that are deferred beyond 12 months from closing.  All others will include them in your DTI regardless of their status.

Valued Member

Re: deferred student loans

Hi again! I went and double checked with my loan officer and was told that FHA will not include student loans into the DTI just as long as they ARE deferred for 12 FULL months!

 

Therefore bigboihill you are correct.

 

You also have to have that in writing from the financial institution handling your loan. However, should you happen to look into USDA, it is the same with them. Student loans MUST be deferred for a full 12 months, otherwise they will have to calculate the monthly payments into the DTI. Our situation was different since we both completed school and our loans were no longer in deferrment but in a grace period and our repayments we to begin just this past month. 

 

GOOD LUCK!!! Smiley Happy

Valued Member

Re: deferred student loans

I don't have that much in loans....about 8500 but I'm graduating in May so I guess I would have to include them Smiley Sad


Starting Score: 674 8/2010
Current Score: Your TransUnion FICO® score:
703
On November 17, 2012

Goal Score: 720+


Take the FICO Fitness Challenge

Valued Contributor

Re: deferred student loans

You could always go for another degree.

Valued Member

Re: deferred student loans

I just wanted to clarify this for others.. USDA will NOT ignore student loans that are deferred.  They still have to be calculated into your DTI.  Here is an excerpt from the USDA guidelines:

 

Deferred Student Loans and Debt Ratio Calculations:
Deferred student loans should be included in the debt ratio calculations regardless of the
deferment period.   If the credit report does not indicate a monthly repayment amount, Lender may
use the monthly payment amount provided by the loan servicer, or 1% of the loan balance reflected
on the RMCR.

 

Unless the guidelines have changed since April of this year, USDA will count all student loans into the DTI calculations.  However, if there is no payment showing, they will calculate a payment for you, using 1% of the total debt.  

 

Here is a link to the underwriting guidelines from which I snatched an excerpt:

http://www.rurdev.usda.gov/SupportDocuments/MA_GUARANTEED_RH_HANDBOOK.pdf