student loans and mortgages

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Replied by FrankN on topic Deferred loans and mortgages

Wanderer wrote: In reference to mortgages, the debt to income has been around as long as mortgages have been issued. The only thing that changes is what lenders included in the debt to income formula. I can remember when it was 25% everything, then to 33% and then up to 36%. All depends on the economy, market place and how aggressive FHA, VA, Fannie Mae and so on want to be in relation to stimulating home loans.


I just went through the mortgage application process and my bank told me their benchmark was 36%, I was surprised how high it was. luckily mine was not that high as I would never put myself in that situation.
2 years 4 months ago #1

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Replied by Wanderer on topic Deferred loans and mortgages

In reference to mortgages, the debt to income has been around as long as mortgages have been issued. The only thing that changes is what lenders included in the debt to income formula. I can remember when it was 25% everything, then to 33% and then up to 36%. All depends on the economy, market place and how aggressive FHA, VA, Fannie Mae and so on want to be in relation to stimulating home loans.
2 years 5 months ago #2

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Replied by Tishbel on topic Deferred loans and mortgages

FrankN wrote: I have read that most banks also use this in their analysis.

I guess it makes sense since the loans have to be paid off at some point, and banks always assume the worst. Do they do the same with other delayed repayment debts, like the "buy now pay nothing" for 12 months deals that some stores give?
2 years 5 months ago #3

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Replied by FrankN on topic Deferred loans and mortgages

I have read that most banks also use this in their analysis.
2 years 5 months ago #4

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Replied by Goldbug on topic Deferred loans and mortgages

Egghead wrote: I'm curious to know if deferred loans would still be factored in when applying for a mortgage. If you have secured a job with some options for promotion it may be tempting to hope for the best regarding your income at the time the loans come due, though I doubt the bank see it that way.

According to the Wall Street Journal , deferred loans are taken into account as part of a debt-to-income ratio and some lenders include estimated repayments in their figures. Since 2014 it has been more of an issue because of rules brought in then about what the ratio can be.
2 years 6 months ago #5

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Replied by Egghead on topic Deferred loans and mortgages

I'm curious to know if deferred loans would still be factored in when applying for a mortgage. If you have secured a job with some options for promotion it may be tempting to hope for the best regarding your income at the time the loans come due, though I doubt the bank see it that way.
3 years 6 months ago #6

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Replied by Meya on topic Re: student loans and mortgages

From the information that I have observed, student loans are in a totally different credit bracket from credit cards and the ratio's of debt-to-income. For your information, I would carefully observe and pay close attention to your income - mortgage + student loans + bills. Those are the most important factors which will reflect your actual budget. You are going to be paying on your student loan for many years ahead, which is considered fixed. You can control your spending habits and the way you utilize your credit, but the student loans are going to be there so please pay close attention when considering a mortgage.
8 years 10 months ago #7

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If my student loans are deferred until 2013, and they are worth $25,000, will they prevent me from buying a home?
8 years 10 months ago #8

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