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Student Loan -- Debt to Income ratio?

Hi
I have around 40k in student loans and looking into a FHA loan for a townhouse in my area. I do not have any credit cards, and the only other continual debt I have is my 5k car loan that has been consistantly paid on time every month. My credit score isnt idea, but I've been building it back up and do not have more than 2 things on there outstanding that I have been working on removing. I have seen alot of conflicting information as to whether student loans do or do not affect the debt to income ratio. I am currently in school to get my masters and have 2 of my 3 student loans in defferment while I am contunially paying off the 3rd. I wont graduate from my masters program for another year and a half.
Any tips on how I can work to get approved for a 90-100k first time home buyer loan? I have a 10% downpayment and understand my rates will be higher than normal.
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May 14 2013 - Derry
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FHA will typically not require you to add deferred students loans into the debt ratio if you can show that the loans will be deferred for at least 12 months from the time of closing.
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May 22 2013
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User,

FHA is looser on the student loans, but you pay through the nose for it. If you have 10% down, you are way better off trying to go conventional. It is better to have a little higher rate with a lower payment than a lower rate with MI jacking up your payment. FHA is actually the expensve loan. The mortgage insurance premium and monthly MI is "horrendous". The fact that by the time you buy, you will have the monthly MI for the life of the loan is also "horrendous".
The hard part about derferred loans is that they are deferred for 12 months at a time usually and you have to show the underwriter they will be deferred for 12 months to get them taken out of your DTI. So, you need to have them deferred at the same time you are closing. If your credit report shows a $0 payment, the lender will need to use 2% of the balance for the payment.  
It is a good time to get your foot in the door of home ownership. As rental rates hit all time highs and the housing costs start to ramp back up, time is money.
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May 22 2013
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FHA is pretty easy.  If you can show they are in deferred for at least a year then they will not be counted against you.  Also your credit score will matter, anything under a 640 I wouldn't even bother your rates will be horrendous and you'll be paying for it for a long time.
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May 14 2013
 
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Student Loan -- Debt to Income ratio?
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May 22 2013 | 3 answers
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