Home Buying in 06705>Question Details

Leslie, Home Buyer in 10475

I have student loans. Will FHA hold this against me?

Asked by Leslie, 10475 Fri Mar 30, 2012

My loans are not in default and they are paid on time. Right now, I am making payments, but it's based on an income-sensitive plan. After the year is up, the amount I pay will go back to normal. I never had problems paying the regular amount off before, but I asked for an income-sensitive plan so I can use my pay towards attorneys, closing costs, repairs, etc. I have already been pre-approved and they are aware of my student loan, but now I am concerned that FHA will hold the amount I pay against me. I wonder now if that was such a smart move.

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5
George Raymondo’s answer
Your student loan will certainly be a factor when calculating your DTI (debt to income ratio). Many young people have their loans in deferment as they continue pursuing their education, but once finished the real payment will become due and it is that payment we have to hit you with. As long as your loan(s) are current you will have no problem but the more debt you carry the lower your buying power is.

Best of Luck!
1 vote Thank Flag Link Sat Mar 31, 2012
Thank you all. You've given some great advice and peace in this issue. Thanks.
0 votes Thank Flag Link Sat Mar 31, 2012
Your student loan should not be an obstacle to obtain a mortgage provideing that all other qualification criteria is met. By the way I will strongly advise to make your mortgage broker aware of the fact that the amout you are paying will go up by the end of the year for few reasons. First - if your LTV ratio is above regulated - you should look for a cheaper property . Don't stretch up beyond what you can afford considering higher student loan payment.

Iliana Ivaova P.A.
Licenced Real Estate and Mortgage Broker
0 votes Thank Flag Link Sat Mar 31, 2012
Hi Leslie,

Thanks for the question. If you pay your loans on time and have a decent credit score, the student loan payment agreement you made will not be a problem concerning an FHA backed loan. The lender will evaluate your loan risk based on your payment history, income, and employment history.
Have you considered a CHFA loan. The rates are phenomenal and you may even qualify for down payment assistance and closing cost coverage. I can put you in touch with a lender I refer my clients to if you would like to speak in greater detail about it.
If I can be of further help please email me at SSimard@alliancerealtyne.com.
Best Regards,

Stephen Simard
0 votes Thank Flag Link Sat Mar 31, 2012
It will count as part of your ratio of totat debt. The person to ask is a local and trusted loan officer who can guide you through the process.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Fri Mar 30, 2012
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