Will my student loans lower the amount I am pre-aproved for?
I know that any payment towards debt will reduce my buying power, however my husband and I are both full time students. We both work full time as well. My husband will be done with school in two years. I will be done in three years. My husband works alot of over time at his job and our lender said his over time could not be considered because he has not been on the job for three years. He also receives a housing allowence while in school (Post 9/11 GI Bill). He will be receiving this for the next two years, our lender said it also can not be counted because it will not be for three years. Also I am told that we have to account for student loan payments--I will not have to make a payment for over three years and can not get a monthly statement from the loan officer because no payment is due. I guess my question is can all of our income really not be counted? and How can my student loans count against me when I will not have to make a payment anytime soon? (also ALL of our current debt will be paid off in 12 months.) by Rikki2_849_871 from Orlando, Florida. Sep 21st 2011
David Webber (DavidWebber)
#57 ranked lender in Texas - 71 contributions
In a short answer, Yes. Because you are measured on your ability and perpensity to pay back any loan, many investors have extended guidelines that are called overlays. While most student loans and student assistance programs are backed by the federal sytstem, one day you will be paying them back and the lenders want to count that debt as if it were today, even though the debt is deferred. Since a mortgage is a long term entity, all lenders want to assure the debt is paid and that you will be able to handle the debt in years to come.Most lenders use a formal set of rules of engagement set up by the federal statutes depending on loan programs, ultimately the lenders are just as responsible for the financing as you are. Being regulated, It is in their best interest to protect their financing ability. Therefore, my advice is if you really want to endure home ownership then the best method is to be patient. Get your degrees, graduate, and find the dream jobs. Relocation many times can lead you down a path that may require a move. Who knows what your future can bring, better interest rates, better housing rates, a better economy? 24 to 36 months seems like a lifetime but in the scheme of things, one who is diligent just might be the best decision ever made. Cheers!
Nancy J Releford (nancyreleford)
#4 ranked lender in Tennessee - 233 contributions
If you do an FHA loan, & your student loans are deferred for more then 12 months then they are not counted towards you debt!
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
I'm not sure waiting is the best advise someone can give you here... Rates will never be this low, and housing prices are in the basement... you should ABSOLUTELY be looking to buy now... that being said, Nancy is correct.. FHA guidelines will ignore any payments for student loans if they are deferred for 12 months or more, however DWebber is correct as well in stating that lender overlays might include a payment into your ratios. My suggestion is to work with a Mortgage Broker, (Not A BANK), and have him run your particular scenario past his vast lender network.. I know here in Arizona, there are several lenders who will allow what ever FHA approves, with no overlays... i'm sure there's a lender in FL doing the same... WilliamAcres.com
Ask our community a question.
Get an answer
Related Questions
