Smart Moves for Managing Student Debt When Applying for a Mortgage in Florida

The Truth About Lending

Understanding how student loan debt affects qualifying for a mortgage and strategies that can be used.

Join us for an insightful discussion on the intersection of student loan debt and mortgage applications!

When you're gearing up to get prequalified for a mortgage, your total student debt becomes a crucial factor in the equation. Whether you're actively making monthly payments, in deferment, or in forbearance, it all impacts the process.

If you're in deferment or forbearance, we follow specific guidelines to calculate your monthly obligation. Depending on the loan program, this could mean using 1% or 0.5% of your outstanding student loan debt. However, if you've enrolled in an income-based repayment plan, your actual payment may be lower than these calculations.

We strongly recommend exploring income-driven repayment options if you haven't already. Let's break it down with an example: Suppose you have $20,000 in student loan debt. For an FHA loan, we'd typically calculate a $100 monthly payment (0.5% of $20,000), while for a conventional loan, it would be $200 (1% of $20,000).

However, if you're on an income-driven repayment plan and paying, say, $1 a month, we'll consider that instead. It's crucial to communicate with your student loan servicer to explore these options, especially if you're eyeing government-related loans like FHA or VA. Having a clear understanding of your student loan status can make all the difference in your mortgage journey.

Join us as we navigate the complexities of student loan debt and arm you with the knowledge to make informed decisions about your mortgage application! Don't miss out – hit that play button now!

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