Being denied last minute because IBR will change in 12m

[Anonymous]

we are on FHA, we were approved. We came out of defferement, we went on IBR to trigger a payment. IBR is ALWAYS for 12m, they are denying last minute because IBR will change after this point. Is this correct? is there anything we can do?  It looks like we can never buy a house then if FHA doesnt allow IBR

[Anonymous]

My understanding is that you have to use standard payment. IBR is not acceptable. That's my understanding as a consumer. Someone else should be able to help you more.

[Anonymous]

So only people on standar repayment plans can get mortgages now?

[Anonymous]

For FHA loans they will use 1% of your outstanding loan balance if you are on IBR (someone correct me if I have this confused with conventional). That factors in to the DTI calculations and you may not qualify for as large of a loan.

Have you talked to your loan officer yet to see what your options are at this point?

You said you were approved. Was that a pre-approval and now that you have made an offer and are going through underwriting they are denying the loan? I don't understand what stage of the process you are in by your post. I would definitely call my LO and understand the calculations and what you might be able to do moving forward.

[Anonymous]

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@Anonymous wrote:
For FHA loans they will use 1% of your outstanding loan balance if you are on IBR (someone correct me if I have this confused with conventional). That factors in to the DTI calculations and you may not qualify for as large of a loan.

Have you talked to your loan officer yet to see what your options are at this point?

You said you were approved. Was that a pre-approval and now that you have made an offer and are going through underwriting they are denying the loan? I don't understand what stage of the process you are in by your post. I would definitely call my LO and understand the calculations and what you might be able to do moving forward.

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Conventional loans will use the higer of 1% of the outstanding loan balance OR the actual monthly payment UNLESS you can prove that the actual monthly payment (under 1%) will fully amortize the loan without payment adjustments. So if you have IBR or graduated student loans, it is likely that 1% of the outstanding student loan balance will be used unless your actual payment is higher than 1% of the outstanding balance.

For FHA, the actual payment on the credit report will be used in DTI ratios UNLESS the monthly payment shown is $0 (due to deferrment or IBR). If the monthly payment shows $0, the future anticipated monthly payment (must obtain documentation from creditor) may be used. If the future anticipated payment is not available, 2% of the outstanding balance must be used in DTI ratios.

Yes, it is quite convoluted.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:
For FHA loans they will use 1% of your outstanding loan balance if you are on IBR (someone correct me if I have this confused with conventional). That factors in to the DTI calculations and you may not qualify for as large of a loan.

Have you talked to your loan officer yet to see what your options are at this point?

You said you were approved. Was that a pre-approval and now that you have made an offer and are going through underwriting they are denying the loan? I don't understand what stage of the process you are in by your post. I would definitely call my LO and understand the calculations and what you might be able to do moving forward.

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Conventional loans will use the higer of 1% of the outstanding loan balance OR the actual monthly payment UNLESS you can prove that the actual monthly payment (under 1%) will fully amortize the loan without payment adjustments. So if you have IBR or graduated student loans, it is likely that 1% of the outstanding student loan balance will be used.

For FHA, the actual payment on the credit report will be used in DTI ratios UNLESS the monthly payment shown is $0 (due to deferrment or IBR). If the monthly payment shows $0, the future anticipated monthly payment (must obtain documentation from creditor) may be used. If the future anticipated payment is not available, 2% of the outstanding balance must be used in DTI ratios.

Yes, it is quite convoluted.

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I had a feeling I was a little off, what a big mess the recent changes have created.  I get what the government is trying to do but at the same time I feel so bad for people wanting to buy a home.  

So if someone is in IBR, it reports as $0 instead of their actual IBR payment?  That's the part where I don't understand.  No wonder why my LO was happy I didn't have any student loans, it is easier for him to navigate the ch7 than all these new changes.

[Anonymous]

We are to close on 23rd. We had approval not pre approval at this stage. Loan went to some higher up underwriter that denied it. We are on IBR with a payment amount. We came out of deferemrbt on all loans and went on IBR to generate a payments.

Underwriter saying it must be a steady payment for more than 12 months but IBR doesn't work that way.

[Anonymous]

For FHA, it is supposed to be what's being reported on the credit report as long as it isn't $0. Not sure why the underwriter would deny your loan for IBR when the rules clearly state what dpeezy said.

[Anonymous]

I think because the underwriter either doesn't understand or quicken has their own rules that say they want more than 12 months of the IBR payment . On IBR we have a 400 payment out of IBR 4000. So 12 months from now the letter from Fedlosn says payment will be 4000. For next 12 months while IBR is certified payment is 400.
I don't even understand why there is multiple under writers or how they went from giving us a letter stating " your loan is approved and fully underwritten " to this ....