$0 IDR on Student Loans and DTI

flgirl004 — Thu, 21 Dec 2023 17:32:04 GMT

Hello there! I was hoping someone could help me. I am a first-time home buyer in Florida and have been getting conflicting info from various lenders. My student loan payment used to be less than $50 and then when they came out w/the new SAVE program they unfortunately automatically lowered my IDR/IBR payment to $0. My loans have been in repayment since September and show on my credit report. During COVID, lenders told me that w/my loans in deferment they would use .5% or 1% of the balance in DTI so it basically pushed me out of becoming a homeowner because I still owe $87k as I wouldn't have qualified for anything I'd want to live in, much less own. So I decided to wait until repayment began.

Per the 'soft' credit report they pulled, my mid score is 772 (not sure if it matters). I've been in contact with some of the big lenders. Two so far have said they can use the $0 letter I have from my student loan servicer for my DTI but the third one said they would use .5% or 1% of the balance in DTI and not only that, but that all lenders are required to use that figure, essentially saying the other two lenders were incorrect. So, now I'm lost again. btw I don't really worry about my student loans as they're supposed to be forgiven under public service loan forgiveness program (PSLF) passed by Congress in 2007 in the next couple of months.

Can anyone confirm who is right? Fannie Mae says they can accept the $0 letter on their website so I'm not sure who to believe. I don't want to officially apply for a mortgage and ding my credit just to be told 'no', otherwise I will have to wait until they're removed from my credit (who knows how long that will take).

Thanks so much!

Re: $0 IDR on Student Loans and DTI

ShanetheMortgageMan — Thu, 21 Dec 2023 17:38:29 GMT

Fannie Mae is very clear that you can use $0/mo as the payment in your situation. Their guidelines say:

If the borrower is on an income-driven payment plan, the lender may obtain student loan documentation to verify the actual monthly payment is $0. The lender may then qualify the borrower with a $0 payment.

I'd recommend you go with one of the first two loan officers.

Re: $0 IDR on Student Loans and DTI

flgirl004 — Thu, 21 Dec 2023 17:46:11 GMT

Thank you so much, you made my day!

Re: $0 IDR on Student Loans and DTI

ShanetheMortgageMan — Thu, 21 Dec 2023 17:51:55 GMT

You're welcome!

Happy holidays.

Re: $0 IDR on Student Loans and DTI

flgirl004 — Thu, 21 Dec 2023 17:52:59 GMT

Happy Holidays!

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$0 IDR on Student Loans and DTI

Re: $0 IDR on Student Loans and DTI

Re: $0 IDR on Student Loans and DTI

Re: $0 IDR on Student Loans and DTI

Re: $0 IDR on Student Loans and DTI