FHA Mortgage + Student Loans w/IBR

[Anonymous]

Consumer Real Estate Finance Co.out of Ft. Lauderdale. It was mostly a good experience with a few hiccups but in the end we closed on our deal. They were excellent with communicating with us overall but our LO was brand new (although he didn't state this I found out on NMLS) and occasionally his communication was not so hot but nothing like the weeks of lack of communication I have heard about and even when we got cold feet he steadied the boat and moved us forward.

[Anonymous]

Thanks,

I live(rent) in a county that qualifies for USDA but was told that they would have to use 1% and not my IBR payment. Unless, of course, my IBR still kept me within the DTI guidelines.

[ShanetheMortgageMan]

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@Anonymous wrote:

Thanks,

I live(rent) in a county that qualifies for USDA but was told that they would have to use 1% and not my IBR payment. Unless, of course, my IBR still kept me within the DTI guidelines.

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USDA will never use an IBR payment.  If you are on an IBR payment, then USDA will use 1% of the balance to qualify.  Freddie Mac will use the IBR payment though, assuming it's >$0.

[Anonymous]

That is the way I understood it as well.

My IBR is $190/mo so I'm hoping that is the amount that they will be able to use. Freddie Mac that is....

Thanks

[lamplight2012]

Can someone please explain what this means?

"the repayment fully amortizes the loan"

[Anonymous]

I believe it means that the payment schedule and amount you are paying will end up paying the loan off within an allotted time (20-30yrs). If your loan is $225k and your IBR payment is $75/mo, you will NEVER pay it off

[Anonymous]

I will have to go back out and get the links to each, but it's copypasta from Fannie, Freddie, USDA and FHA resources. 

[Anonymous]

Directly from the USDA guaranteed lenders handbook located at :
http://www.rd.usda.gov/files/3555-1chapter11.pdf

Student loans. Lenders must include the payment as follows:
 Fixed payment loans: A permanent amortized, fixed payment may be used in the debt ratio when the lender retains documentation to verify the payment is fixed, the interest rate is fixed, and the repayment term is fixed.

 Non-Fixed payment loans: Payments for deferred loans, Income Based Repayment (IBR), Graduated, Adjustable, and other types of repayment agreements which are not fixed cannot be used in the total debt ratio calculation. One percent of the loan balance reflected on the credit report must be used as the monthly payment. No additional documentation is required.

[ShanetheMortgageMan]

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@Anonymous wrote:

I will have to go back out and get the links to each, but it's copypasta from Fannie, Freddie, USDA and FHA resources. 

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I don't mean to argue, but the verbiage you typed in would not come from any lender guidelines... as they are never that simple.  When fully analyzed, the explanation can be shortened to make it more clear like you typed (although the FHA & USDA info you typed isn't accurate, for FHA it was never that way and for USDA they updated guidelines from what you typed).  If you copied/pasted that info, then it looks like it came from a blog-type resource.