- Posted January 26, 2014 by
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Don't Let Student Debt Stop You from Buying a Home, Maximize Your Purchasing Power
Deferred installment debts, such as Student loans must be included as part of the borrower's recurring monthly debt obligations. If the borrower's credit report does not indicate the monthly amount that will be payable at the end of the deferment period, the lender must obtain copies of the borrower's payment letters or forbearance agreements so that a monthly payment amount can be determined and used in calculating the borrower's total monthly obligations.
An inside secret when dealing with student loan companies is if you have a loan in forbearance and you make monthly payments the student loan company may report the amount you are paying as a monthly payment on your credit report. This is helpful in establishing low monthly debt obligations and increasing your purchasing power.
If the student loan debt monthly obligation is not showing on your credit report in lieu of obtaining copies of payment letters or forbearance agreements, the lender can calculate a monthly payment using no less than 2% of the outstanding balance as the borrower's recurring monthly debt obligation. However, if any documentation is provided by the borrower or obtained by the lender that indicates the actual monthly payment, that figure must be used in qualifying the borrower.- Boston Mortgage Lender & Home Loans