topic Re: Been paying defaulted student loans for 5 years looking to get a mortgage in Mortgage Loans

Been paying defaulted student loans for 5 years looking to get a mortgage

Anonymous — Thu, 11 Mar 2021 20:00:46 GMT

I got divorced in 2014 and at that time I declared banruptsy and my student loans (which are consolodated with my ex-husband) went into default. We got on a payment plan 5 years ago, but we are not eligible for any rehab program or direct consolidation - my ex-husband will not get a loan to cover his half of the student loans so I am stuck with the default status - just consistently making on-time payments.

I have worked hard to rebuild my credit - I am 6 years out of Bankruptsy. I have no negative marks on my credit report except for the 6 year old bankruptsy. My student loans fell off my report. My scores are 726, 701, 703. I would like to buy a home. Do you think I can get a mortgage since I have been making consistant on-time payments to my defaulted student loans for 5 years?

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

dragontears — Thu, 11 Mar 2021 20:07:06 GMT

@Anonymous wrote:
I got divorced in 2014 and at that time I declared banruptsy and my student loans (which are consolodated with my ex-husband) went into default. We got on a payment plan 5 years ago, but we are not eligible for any rehab program or direct consolidation - my ex-husband will not get a loan to cover his half of the student loans so I am stuck with the default status - just consistently making on-time payments.

I have worked hard to rebuild my credit - I am 6 years out of Bankruptsy. I have no negative marks on my credit report except for the 6 year old bankruptsy. My student loans fell off my report. My scores are 726, 701, 703. I would like to buy a home. Do you think I can get a mortgage since I have been making consistant on-time payments to my defaulted student loans for 5 years?

For people to accurately answer your questions could you answer the following:

Are the student loans federal or private?

Are the student loans currently on your reports?

Do you know what mortgage type you want? (FHA, VA, USDA, Conventional, Non-QM, etc.)

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

Anonymous — Thu, 11 Mar 2021 20:12:05 GMT

My student loans are no longer showing on my credit report.

The student loans are federal student loans.

I'm looking to do a conventional mortgage.

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

dragontears — Fri, 12 Mar 2021 02:55:51 GMT

@Anonymous wrote:
My student loans are no longer showing on my credit report.
The student loans are federal student loans.
I'm looking to do a conventional mortgage.

You should be able to find a lender, just tell them about the payment up front (I would do it before completing an application or allowing them to pull your credit) to make sure that they don't have overlays that will result in you not getting approved.

Unsolicited advice: interview several lenders before picking one, especially as a first time buyer having a lender you feel comfortable with is important. Different people need different levels of support and not every lender does a good job with the endless questions that is thought up the first time you go through the process.

I would ask your family/friends/coworkers if they know any good lenders but I have had the best luck getting recommendations from my realtor as they know the local people that will close on time

And finally stay away from places like quicken they are quick to have you preapproved but closing is another story (had a coworker be told that they couldn't use her income because it was 1099 a week before closing, she had to get her parents to cosign on the loan and it delayed her closing)

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

Anonymous — Fri, 12 Mar 2021 12:28:35 GMT

Thank you so much for the advice. I will shop around

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

VALoanMaster — Mon, 15 Mar 2021 17:54:19 GMT

@Anonymous wrote:
I got divorced in 2014 and at that time I declared banruptsy and my student loans (which are consolodated with my ex-husband) went into default. We got on a payment plan 5 years ago, but we are not eligible for any rehab program or direct consolidation - my ex-husband will not get a loan to cover his half of the student loans so I am stuck with the default status - just consistently making on-time payments.

I have worked hard to rebuild my credit - I am 6 years out of Bankruptsy. I have no negative marks on my credit report except for the 6 year old bankruptsy. My student loans fell off my report. My scores are 726, 701, 703. I would like to buy a home. Do you think I can get a mortgage since I have been making consistant on-time payments to my defaulted student loans for 5 years?

Hi @Anonymous,

You should be fine to go conventional as long as the lender does not pull CAIVRS. Also make sure and see if Home Possible or Home Ready are an option for you. These programs are designed to compete with FHA but the do have county income limit restrictions.

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

AZEsq — Fri, 02 Apr 2021 20:03:53 GMT

CAIVRS will be an issue. You need to find a lender that specializes in student loans issues. Good luck!

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

Anonymous — Fri, 21 May 2021 17:24:06 GMT

I just wanted to give an update. I had been paying my defaulted student loans on time for 5 years and even though they are still listed in defualt status my on time payments were enough to get me approved for a conventional loan. I closed yesterday on my house with no issues during the mortgage application process. Thank you for all the advice.

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

VALoanMaster — Fri, 21 May 2021 18:02:46 GMT

congrats!

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

Anonymous — Fri, 21 May 2021 18:55:15 GMT

That is SO exciting! Congratulations!

Re: Been paying defaulted student loans for 5 years looking to get a mortgage

pfries911 — Fri, 21 May 2021 20:53:22 GMT

That is awesome!

I am always happy to hear another success story. Congratulations!