How does student loan debt not currently due affect DTI?

No the student loans are deferred for over three years so they would not be included in your debt to income calculation for the purpose of obtaining a mortgage. Tommy Peoples, Branch Manger, Southwest Funding, Daphne, AL, 877-634-2390

Deferred Student loans are calculated differently depending upon whether the mortgage being applied for is an FHA, Conventional, or an USDA loan. For an FHA loan, the loan payment need not be included in the qualifying ratios as long as it is documented (usually on the credit report) that the loan is in deferment for at least one year from the note date of the mortgage for which is being qualified. On USDA, minimum payment must ALWAYS be included for any loan even if it is a deferred student loan. This is true even if the repayment of that loan will not start for over a year. In most cases the credit report will not show what that minimum payment will be, so one must get a quote from the servicer and have it added to the credit report. This payment is then used in the qualifying of the applicant, The same applies for Conventional loans. Keep in mind that these are the guidelines for FHA, FNMA & USDA.. each lender can have their own guidelines in addition to Conforming guidelines. So even though FHA does not require it, FHA does not lend money, they only insure loans against default, the lender with the $$ to lend will often times have their own overlays, and it's these overlays that might require the minimum student loan payments to be added to your DTI. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Deferred Student loans are calculated differently depending upon whether the mortgage being applied for is an FHA, Conventional, or an USDA loan. For an FHA loan, the loan payment need not be included in the qualifying ratios as long as it is documented (usually on the credit report) that the loan is in deferment for at least one year from the note date of the mortgage for which is being qualified. On USDA, minimum payment must ALWAYS be included for any loan even if it is a deferred student loan. This is true even if the repayment of that loan will not start for over a year. In most cases the credit report will not show what that minimum payment will be, so one must get a quote from the servicer and have it added to the credit report. This payment is then used in the qualifying of the applicant, The same applies for Conventional loans. Keep in mind that these are the guidelines for FHA, FNMA & USDA.. each lender can have their own guidelines in addition to Conforming guidelines. So even though FHA does not require it, FHA does not lend money, they only insure loans against default, the lender with the $$ to lend will often times have their own overlays, and it's these overlays that might require the minimum student loan payments to be added to your DTI. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

William's answer is spot on!

As always, William's answer is on the money. I would recommend getting a referral to a loan originator in your area to get information as it pertains to your situation. Also, be sure to vet the loan originator through www.nmlsconsumeraccess.org Good luck!

Use FHA. See more complete answer by William, on of the fine members of this forum.

Depending on whether the student loan is deferred or not, the payment is counted as reflected in your student loan statements.If the debt ratio doesn't work, consider taking a 10 year arm these days. It secures you for 10 years and not to mention, its a lower rate that a 30 year fixed right now. Good luck, I cannot lend in Alabama but I can refer you to 3 friends who work with banks who can.Thanks Manuel

Student loans will always count in your debt servicing, even if the payments are deferred. Why? Because you will eventually have to be making those payments, and if your income does not change, you may not be able to afford the payments when they become due. FHA on the other hand is much more liberal. For most lenders, as long as the payments are deferred at least 12 months past the close of escrow, then they will not be counted in your debt servicing for purposes of qualifying. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Certified by the National Association of Mortgage Professionals and Licensed in California and Arizona ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Student loans will always count in your debt servicing, even if the payments are deferred. Why? Because you will eventually have to be making those payments, and if your income does not change, you may not be able to afford the payments when they become due. FHA on the other hand is much more liberal. For most lenders, as long as the payments are deferred at least 12 months past the close of escrow, then they will not be counted in your debt servicing for purposes of qualifying. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Certified by the National Association of Mortgage Professionals and Licensed in California and Arizona ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Student loans will always count in your debt