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Simply put, do the monthly payments on a student loan in forbearance or deferment count in your DTI?
My wife and I are applying for our second home mortgage (selling current home, moving, buying a home). She was a student who graduated with her bachelors in May. She starts her DDS degree in August. So, we stuck her student loans in forbearance for the time being and they will go in deferment as soon as her schooling starts in August.
Will these be included in our DTI? I know mine will, I pay on them monthly, but hers? We are discussing FHA and 5% down conforming.
Thank you!
mine did not count in my dti
Oh, that's encouraging. Was this a conventional or FHA loan?
Thanks!
it was a VA loan
@Estexan07 wrote:Simply put, do the monthly payments on a student loan in forbearance or deferment count in your DTI?
My wife and I are applying for our second home mortgage (selling current home, moving, buying a home). She was a student who graduated with her bachelors in May. She starts her DDS degree in August. So, we stuck her student loans in forbearance for the time being and they will go in deferment as soon as her schooling starts in August.
Will these be included in our DTI? I know mine will, I pay on them monthly, but hers? We are discussing FHA and 5% down conforming.
Thank you!
If you are using FHA or Conventional, they will use either what your payment is or 1% of the balance, whichever is greater. FHA will be using the 1% in July of this year.
Well then, looks like I'll be applying for conventional without my wife.
Her loans total $308/month, not being paid since they are in forbearance/deferral. Leaving those off drops my DTI from 9% to less than 4%, before mortgage.
How far out was for deferment at the time of your VA loan being processed?
i took a home ownership class in January, and the lender stated that loans in forebearence are frowned up as it looks like you are having a hardship. However, as another poster stated those that are in deferment 1-2% of the balance is used.