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How does school loans affect purchasing a home.

I was in the process of buying a home and the lenders took four months to deny my loan because the payment on the loans and the first house payment would be one year apart form each other. Two months prior it was my debt-to-income ratio was to high, after that it was I had to pay off a vehicle first. Is it possible to buy any home when your school loans come out of deferment in one year? If they did not squander away so much time I would have time to close and more than one year to be in school deferment.
  • August 09 2014 - Woodhaven
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Answers (2)

Cyndia hit every point perfectly. I can also discuss in more detail if you wish to contact me.
  • September 09 2014
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If the guaranteed deferment is not at least 12 months then the student loan debt must be considered in the debt ratios.  Student Loans are tough.  Lenders must get a letter from each of the student loan lenders and get the projected payment amount and when the payments begin.  The only way to ignore the debt is if that first payment of the student loan is at least 12 months after the first payment of the new mortgage loan.  It can get very complicated, and can be a time consuming process.  Even then, once you get thru all the information, it might get denied thru underwriting.  Especially if the borrower has less than great credit, and little or no reserves, which is often the case with folks with student loans.

  • August 11 2014
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