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I have about 80K in student loans, currently in deferment (just graduated), most of them federal. As a result, they are income-based from the moment I apply for income-based repayment (which I can do at any time).
I read that the FHA allows student loans in deferment to not be counted. How does the USDA calculate student loans in the debt to income ratio? Should I apply for income-based repayment before my mortgage, is this necessary?
Thank you.
guideliens are 29/41 and your student loans on ICR are what you report and what shows on your credit report. I think this program was developed for people like us with high student loans. My student loans are $500k. If you went by that i would never be able to afford a house.
Well, does it count as what shows up on the credit report or just what I report? You say "and" but I don't see how it can be both if you're on income based repayment. If it goes by whats on my credit report they'd take the raw number and divide by the months plus interest, not factoring in the income-based variable.
Your amount paid is on the CR with the debt. That is how they determine or verrify.
That makes absolutely no sense. Thank you for trying but in your first post you said two thing that directly contradicted each other, essentially answering "yes" to both my of my questions which is impossible. This post I can't make any sense of.
Does anybody know this information? Thank you again.
I too wonder about this. my loan payments are based on IBR which for sake of this conversation are 88 per month (group A and B) on my reports they list my payment of lets say 288, but I have a paper that states I pay 88 until next year when you re-certify via sending in your W'2 and tax return.
I have asked this before, and I believe that if you can provide proof from the lender that the payments will be $x a month, the lender goes by that. If not, they take what's on the report or calculate it on their own, which is typically higher than it really will be. But, if you get something from the lender stating that the IBR will be a certain amount every month, that's good enough.
@andrew232 wrote:That makes absolutely no sense. Thank you for trying but in your first post you said two thing that directly contradicted each other, essentially answering "yes" to both my of my questions which is impossible. This post I can't make any sense of.
Does anybody know this information? Thank you again.
What I know is that they went off the 47.00 a month payment on my credit reports. I applied in May and closed in August. In JUNE , the payment changed to 149 a month. I was able to talk to Direct Loans and tell them to please report the new amount ASAP, which they did. So my LO pulled a new report and went off the new student loan amt. I knew this was coming so I told her and that still fit into DTI. They never asked for anything from DirectLoans.
And FYI, i just learned that once you lock into IBR you can't change to ICR, so if you are going to be making a lot more money in a relatively soon period of time, you might want to go ICR.
hey! this is old but I had the same question. it's been answered here:
http://ncfhaexpert.com/usda-loans/usda-student-loan-updates/
"Student Loans: Income Based Repayment (IBR):
· IBR amounts are not fixed payments and may increase annually.
· IBR payments of $0 are not eligible to be used in the debt ratio.
When an applicant provides documentation of an IBR agreement and payment from the loan servicer the following apply:
1. If the IBR payment is less than $100 and 1% of the total loan balance is more than $100, a minimum payment of $100 must be included in the debt ratios. (READ: Even if you are only being charged $22 a month, we are going to COUNT $100 a month for that debt!)
2. If the current IBR payment is over $100, lenders may use that payment amount in the debt ratios.
We’ve seen several of the IBR cases recently, and with this NEW underwriting clarification, it would mean (in one case) that we are going to count $400 a month for the homebuyers 4 different student loans – when in fact, they are only being CHARGED $89 TOTAL for the 4 loans. This could be a significant determent in qualifying!"
I saw this same text in other places online. Good luck!!!