Plus, each mortgage loan program has its own benefits. Mortgage programs treat each scenario a little different from each other. These include deferment, graduated payment, extended term loans, and income-based repayment (IBR). Income Based Repayment Student Loansįortunately, for many student loan borrowers, the student loan companies offer very flexible payment options. This is especially true for first time home buyers who are typically at the low-income point of their career. We still have to include the new house payment and other debts! It takes a healthy income to qualify in cases like these, which hurts buyer chances. By the way, that is the student loan qualifying payment. If you figure a 1% payment based on $100,000 in student loan debt, that is a $1,000 qualifying payment. These borrowers fully comprehend these numbers and when it comes to buying a house. But, owing $50,000 or $100,000, maybe more in student loan debt is more of a reality these days. The Federal Reserve reported $1.5 Trillion in student loan debt! That number is just too hard to imagine. crossed a student loan debt milestone in the worst way. With the new Freddie Mac student loan guidelines, buyers have some great home purchasing loan options! Student Loan Debt IssuesĮarly 2018, the U.S. This can be a significant hurdle in qualifying for buying a home. Regretfully, even though a buyer may have a low income based repayment student loan payment, FHA requires lenders use 1% of the balance or the fully amortized payment for mortgage qualification. Many times, buyers with student loan debt hear the following mortgage lender response: “Sorry, but when using 1% of your outstanding student loan debt as a payment, your debt to income ratio is too high for a mortgage loan”.
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