Consolidate before mortgage?????

[rm3]

I'm about 6 months out from applying for a mortgage. I currently have about $40,000 in federal loans across 3 servicers(AES, DOE, and KHESL) 16 TLs reporting.....I want a cleaner report as well as a lower monthly payment. Do I have enough time to get through a consolidation and IBR application before applying for a mortgage? SLs will be my only debt.

Thank you!

[SCF]

I don't think that will be a problem, but I would start the process as soon as possible.  I would expect 4-6 weeks for consolidation, and for the IBR paperwork to take another week or two.  You might allow 1-2 months for everything to show up on your credit report, since not all lenders update quickly.

Your current tradelines will remain on your report for 10 years (if they are in good standing), and the new loan (or loans, if you have more than one type of federal loan, you may see more than one new tradeline) will impact your average age of accounts.  If your score is borderline for a loan type or interest rate, you may want to consult with your mortgage lender to see if they reccomend waiting until after the mortgage to consolidate.  They'll help walk you through the potential consequences, and your debt-to-income ratios with/without the consolidation/IBR.

[rm3]

Thank you for responding

[kjel]

My consolidation and IBR set up took 4 months to complete in 2011. I had two different lenders at the time.

The IBR will definitely give you a lower monthly payment and give you a better debt-to-income ratio. As the previous post explained, your old TLs will still be there but show closed/paid and the consolidation will show as a new TL or likely two if you have subsidized and unsubsidized loans.

[rm3]

So I started the consolidation process. I applied on 4/14/2013. Called today and direct loans has already sent requests to the current servicers for loan payoff amounts. They said it should be a couple weeks. I didn't know the consolidation department is in my hometown, Louisville, KY. Go Cards! I hope this goes through quickly and smoothly so I can see the affect it will have on my cr and get any points back I may loose from lower AAoA. I chose the IBR payment plan.

[InvincibleSummer3]

Cool! I'm so excited for you - fingers crossed that your journey towards a mortgage is smooth.

And hi-five to Louisville, by best friend's from there