Student Loans & FHA Mortgages
/Dan Hubrich of Mountain View Mortgage is back and this month he’s explaining recent changes in the requirements of lenders regarding student loans. Take a look!
I have some exciting news from FHA this month. They have loosened up their guidelines on student loans. This will help a lot more people qualify for a home purchase or refinance. A lot of folks have a good chunk of student loan debt but their payments are very low or they don’t have any payment at all due to the loan being in deferred status, etc. Even so, FHA was still requiring lenders to show a minimum monthly payment of 1% of the entire balance on the application. As you can imagine, that made quite a dent into a lot of borrowers debt ratio and they would no longer qualify. The new guidelines just out, have cut that requirement in half to .5% of the balance AND even better news is that we can now use the actual payment amount on the credit report! Many student loans have really low payments so we can now use the lower of the actual payment showing up on credit or .5% of the balance for the payment. Bottom line….a LOT more people will qualify for a home loan now VS before. Reach out to me with any questions anytime