Deferred Student Loans in DTI Calculations
Deferred Student Loans that is deferred more than 12 months is no longer exempt under HUD GUIDELINES. 1% of student loan balance is calculated and used as borrower debt to income ratio calculations. Income Based Repayment Plans (IBR) no longer counts. Borrowers can contact their federal student loan provider and get fully amortized monthly payment on an extended payment plan which is normally 25 years. It turns out to be around 0.50% more or less. Lenders can use this fully amortized monthly payment on an extended payment plan in lieu of 5%. VETERANS are exempt from student loans on DEFERRED STUDENT LOANS that has been deferred for more than 12 months.
