Financing in Largo>Question Details

Dawn Rawley, Home Buyer in Largo, FL

My husband and I have a conditional approval on our home loan. The only condition they asked for is that my student loans be placed in forbearance

Asked by Dawn Rawley, Largo, FL Tue Apr 27, 2010

for one year. I have two student loan companies servicing my loans. Sallie Mae granted a one year forbearance with minimal issues. The second company, My Great Lakes, put the forbearance until 3/28/2011. That is less than one year so now the broker has to fight with the bank to accept it 1 month less than they asked for. Do you think the bank (Bank of America) will grant an acception? If we go into May then it will be longer than 1 month too short... What do you all think?

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If you would like a second opinion I would be glad to look at the deal for 185.00 I am fairly sure we can get it completed.
1 vote Thank Flag Link Tue Apr 27, 2010
I would be happy to run it through our automated underwriting system if you would like another opinion....
1 vote Thank Flag Link Tue Apr 27, 2010
Forbearance will continue to accrue compound interest and the balance can grow substantially over time. Also forbearance requires a hardship application.
Is you income likely to increase substantially over the next few years? If not - weigh out the costs and future impact on the growing student loan debt. Be wise not too eager to pile on more debt for the future. STOP THE INTEREST - PAY OFF THE DEBT, THEN BUY A HOME. This will bring peace of mind and joy when you are ready financially to buy your home. I am a licensed Realtor and a licensed Mortgage Broker. This is the advise I would give my daughter and sons.
0 votes Thank Flag Link Wed Jun 9, 2010
Thanks all. The sellers aren't willing to add anymore money. They are already paying for our closing costs. My student loan payment at Great Lakes would have been 185.00 a month so unfortunately that is hard to make up for with points or the like.

I think our only options are:
1. to try and qualify with the payment included (I think it will make our debt to income too high though),
2. Get the bank to grant an exception.
3. The student loan company offered a solution of having a conference call where I give them verbal permission to speak directly with the bank and the student loan company will let the bank know that I still have 4 years (after the "year" they gave me) of forbearances left. Stafford loans (the type I got) have an automatic 5 years of forbearances that you are granted but you have to apply every year. The student loan company says they have done that before with other lenders and it has worked. So that is still a possibility as well.
0 votes Thank Flag Link Tue Apr 27, 2010
The answers so far seem to be pretty much on the money. The one thing I can tell you from recent experience is that only Bank of America knows what Bank of America will accept today and can't promise they'll accept that tomorrow. This is not unique to them, I am finding very little conformity to the market place right now. Even things that fall into FHA "guidlines" banks are not accepting and they are making them more strict. Tell your real estate agent and the loan officer to put their heads together to come up with a creative solution. Where there is a will there is usually a way. Good Luck
0 votes Thank Flag Link Tue Apr 27, 2010
They will probably have to count that student loan against you, but perhaps they can get automated approval by just counting one of the student loans against you rather than both. There is no way for any one here to guess at this since we don't know your entire circumstances.
0 votes Thank Flag Link Tue Apr 27, 2010
B or A an exception? I guarantee not.

They are doing, I assume either an FHA or Conventional loan that is sold on the secondary market and that's what the rules are.

They are banking on next year that the payment forbearance does not get extended and you will have to pay and no be able to qualify for the mortgage.

Get creative. Have the seller pay points to get your rate down so that you will qualify with the payment (if you can).

Good luck!

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0 votes Thank Flag Link Tue Apr 27, 2010
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