Student loan payments have been deferred during the pandemic. So, you may not have a monthly payment. However, when applying for a mortgage loan, the lenders will calculate a payment to qualify you for the loan.
Fannie Mae and Freddie Mac have specific guidelines for how to calculate the payment.
Fannie Mae: If you have an income-driven payment plan, you may provide the lender with documentation to verify the actual monthly payment is $0. The lender may qualify you with a $0 payment. If the loan is deferred or in forbearance, the lender may calculate a payment equal to 1% of the outstanding student loan balance or a fully amortizing payment using the documented loan repayment terms.
Freddie Mac: For student loans in repayment, deferment, or forbearance, the lender will use the monthly payment reported on the credit report if the reported payment is greater than $0. If the reported payment amount is $0, the lender will use 0.5% of the outstanding loan balance.
If you are trying to qualify for a home loan and you have student loans, contact us and we can help you.
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