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Conventional Loan and Deferred Student Loans

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Conventional Loan and Deferred Student Loans

As I am preparing myself for the next step and apply for a mortgage over the next few months, I am learning more about how deferred student loans impact your mortgage approvals when they are in deferrment.  Here is the scenario...

 

Conventional Mortgage - with 10% down payment

Loan Amount:  $50,000 (condo - not on FHA list) - purchasing the condo I am currently in... Price: $55K

Student Loans: $42K

Income: $40K

Student Loan Status: Deferred until at least 2016...

 

So with the conventional loan, I understand that as long as the Student Loans are in deferrment, the lender must use anywhere between 2-5% (I read somewhere with big banks even as much as 7%) in calculating the DTI - unless you have a letter from the Loan Servicing company stating how much the payments will be... Needless to say, while the loans are in the "in-school" deferrment, they can not be consolidated so you can have one payment with a set amount, and the loan servicer doesn't have a set amount you should be paying monthly.

 

Finally to the question. How would one go about requesting the loan servicer (in this case Navient), to send you something that shows how much the payments would be. Navient stated that since they are in "in-school deferrment" there is no set amount due. I can continue to make payments if I so chose, but there is nothing to show how much my payments would be currently (since no payment is required). 300 months "Extended Payment Plan" brings the payments to about $232/month (rough estimate) while 120 month plan brings payment to $450/month (again rough estimate).

 

DTI with 120 month payment plan: 44%

DTI with 300 month payment plan: 37% (again based on rough estimate after speaking to CSR at Navient)

 

Can the Loan Servicer send you something in writing showing how much the payments will be based on current balances despite the loans being in "in-school deferrment"? If so, what specificially do you have to ask?

 

Thanks again for all your guys' help

FICO® EQ 717 (3/5/15); TU08 732 (3/5/15); EX: 723 (3/5/15) - Last app 3/15/15; Inquiries: A TON!

CITI ThankYou Preferred - CL: $2,000




Starting Scores: 590s on 12/2013. Hover over card image to view details! *After Amex approvals - [I was supposed to be] Gardening!*
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New Contributor

Re: Conventional Loan and Deferred Student Loans

You should contact Navient and request a "Credit Reference Letter" (or something similiar) and make them aware that it is for a mortgage application. They should be able to provide what you need. However, in the event that they can't, your LO should be able to calculate your estimated payments based on your interest rate, amount borrowed, and repayment schedule. 

 

I hope this helps. 




Message 2 of 3
Established Contributor

Re: Conventional Loan and Deferred Student Loans


@Amarie003 wrote:

You should contact Navient and request a "Credit Reference Letter" (or something similiar) and make them aware that it is for a mortgage application. They should be able to provide what you need. However, in the event that they can't, your LO should be able to calculate your estimated payments based on your interest rate, amount borrowed, and repayment schedule. 

 

I hope this helps. 


Thank you. I will call Navient on Monday to discuss this. I appreciate it!

FICO® EQ 717 (3/5/15); TU08 732 (3/5/15); EX: 723 (3/5/15) - Last app 3/15/15; Inquiries: A TON!

CITI ThankYou Preferred - CL: $2,000




Starting Scores: 590s on 12/2013. Hover over card image to view details! *After Amex approvals - [I was supposed to be] Gardening!*
Message 3 of 3
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