Referencing Handbook 4155.1:4. If a debt payment, such as a student loan, is scheduled to begin within 12 months of the mortgage loan closing, the lender must include the anticipated monthly obligation in the underwriting analysis unless the borrower provide written evidence that the debt will be deferred to a period outside this timeframe. Similarly, balloon notes that come due within one year of closing must be considered in the underwriting analysis.
IF a student loan is in deferment status, the deferment must last 12 months or more FROM the date of closing to be excluded from the DTI. Borrowers may request a certain date from most servicers to begin the decrement. A letter from the servicer outlining the account numbers, and verifying the loan holders information must be provided to the lender. A forbearance will be treated similar to a deferment. If a loan is in repayment, the credit report payment is acceptable. However, if the credit report does not show a payment on the report and the loan is not in deferment or will be out of deferment within the next 12 months, the underwriter will ask for proof of the payment. Account numbers provided on letters MUST match the credit report to allow the underwriter to match loans up.
Senior Loan Officer
phone: (502) 905-3708
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