Close

See current mortgage rates on Zillow Mortgage Marketplace

Profile picture for shucky2000

Dad paying off student loans in my name - does it count toward my debt/income ratio?

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 14 2011 - Austin
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (10)

Generally the student loan payment will count towards your DTI ratio. But if you Dad can provide 12 months consecutive cancelled checks, then you have a chance of excluding the student loan payments. But I think it will depend on your overall financial picture.

Jeff Thomas
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
May 23 2011

I suggest talking to a lender. If payments are being made, it shold reduce your debt ratio because it's reflecting on your credit.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
May 23 2011
Although you are technically correct about FHA allowing those practices, as with so many things these days what FHA will allow and what the lenders will allow are two completely different subjects.  If the lender won't go for it, then it really doesn't matter if FHA allows it.  Last time I asked my FHA sources (not that long ago), none of them would allow use of a non-occupying coborrower's income to qualify or ignore a student loan deferred for more than 12 months.  FHA and the lenders both allow contingent liabilities to be ignored, but technically Dad would have to be the primary borrower on the account.  Underwriters seem to be a little sloppy on that point, and I have seen them ignore any account that we can prove is being paid by someone else even when the other party isn't obligated for the loan at all.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 16 2011
For FHA both the statments I made are correct.  Student loans can be dererred and the income of a non occupying co borrower can be used.  Some lenders will not allow this for scores between 600-639.

On that same page of the sellers guide, two paragraphs down, student loan payments must be included for conventional.

Thanks,
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 16 2011
I suggest The Lending Coach do a little research in the 2011 FNMA Selling Guide regarding deferred installment debt (doesn't help, pg 467), contingent liabilities (don't count towards DTI), and non-occupant coborrowers (I have yet to see a case where adding one fixed a DTI problem).
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 14 2011
If they are on your credit they count against you.  Just because he makes payments doesn't matter because ultimately you are responsible.

One thing you can do is either:

1.  get the student loans deferred for at least 12 months to 36 months and prove that

2.  have your dad cosign with you.  If he is making the other payments, I would imagine he would be willing to do that too.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 14 2011
Generally speaking, as long as he is making the payments from his account (and your name is not on the account) and can provide 12 month's consecutive cancelled checks as evidence that you are not the one making the payments, the payments can be ignored in the debt/income ratio.

Sincerely,
Greg
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 14 2011
Yes it will.  You will likely want this to happen prior to you beginning the home buying process as a Lender will want verification of funds that are paying off your Student Loans.

That is an awfully nice gesture by your father.  Make sure and tell him thanks!

Good luck.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 14 2011
If Dad is making the payments from an account your name is not on, and can come up with 12 months of canceled checks to show that he is making the payments, the debt will not be counted in your DTI.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 14 2011
As long as the debt remains in your name and has a balance on it, it will be figured into the calculation for your debt/income ratio.  Take to your local loan officer.  Best of luck.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 14 2011
 
Related Questions
H
Profile picture for James rudyk
Latest answer by James rudyk
September 20 2013 | 9 answers
Can spouse pay entire downpayment?
Profile picture for Tom Burris
Latest answer by Tom Burris
July 26 2013 | 6 answers
Mortgage Qualification
Profile picture for Tom Burris
Latest answer by Tom Burris
May 09 2013 | 11 answers
My realtor states there are absolutely no comps for my half of a duplex. I have a bid on a house, b
Profile picture for Raymond Torres
Latest answer by Raymond Torres
February 20 2012 | 1 answers
Non Resident Alien married to US Citizen seeks mortgage..has SSN, good income but no US tax returns.
Profile picture for Chris Hutchinson
Latest answer by Chris Hutchinson
September 24 2011 | 3 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 614 Terrell Hill Dr # C, Austin, TX Home For Sale
    614 Terrell Hill Dr # C, Austin, TX 78704

     For Sale: $324,900

    • Beds: 2
    • Sqft: 846
    • Baths: 2.0
    • Lot: --
  2. 3608 Windsor Rd, Austin, TX Home For Sale
    3608 Windsor Rd, Austin, TX 78703

     For Sale: $2,495,000

    • Beds: 4
    • Sqft: 5486
    • Baths: 6.0
    • Lot: 9104
  3. 13136 Villa Montana Way, Austin, TX Home For Sale
    13136 Villa Montana Way, Austin, TX 78732

     For Sale: $399,000

    • Beds: --
    • Sqft: --
    • Baths: --
    • Lot: 14941