With student loan payments often differing from what’s on the credit report, it can be
confusing at times knowing how to qualify your borrower, especially since each agency has its own guidelines.
For example, when it comes to deferments, some agencies require calculations that produce much higher payments
for use in DTI qualification.
We broke down some of the most frequently
asked questions for each agency so you can more easily choose the program that’s best for your clients.
A: ALL LOAN TYPES (FANNIE/FREDDIE, FHA, USDA, VA, CARRINGTON NON-QM)
If the borrower is currently paying on a fully amortized plan, then that monthly payment must be used for qualifying.
A: ALL LOAN TYPES (FANNIE/FREDDIE, FHA, USDA, VA, CARRINGTON NON-QM)
If the amount on the credit report is higher than the actual payment, a recent loan statement can be used to qualify with the actual (lower) payment.
A: FOR VA LOANS: If payment is deferred for 10 month's past the closing date
FOR FANNIE LOANS: With an income-driven payment (IDP) plan the payment can be as low as $0
FREDDIE, FHA, USDA, VA, CARRINGTON NON-QM LOANS: Not allowed
A: ALL LOAN TYPES (FANNIE/FREDDIE, FHA, USDA, VA, CARRINGTON NON-QM)
No, a borrower must be in the payment plan for the payment amount to be used.
A: ALL LOAN TYPES (FANNIE/FREDDIE, FHA, USDA, VA, CARRINGTON NON-QM)
Yes, however, the updated payment amount will need to be included on a recent monthly statement.
A: FOR FANNIE GUIDELINES: The higher of these must be used:
FOR FREDDIE GUIDELINES: The higher of these must be used:
FOR FHA GUIDELINES: The higher of these must be used:
FOR USDA GUIDELINES: The higher of these must be used:
FOR VA GUIDELINES: The lower of these may be used:
Example: 5% x $30k loan = $1,500. $1,500/12 = $125 monthly debt obligation.
If the credit report payment is lower it can be used with documentation (e.g. monthly statement)
FOR CARRINGTON NON-QM GUIDELINES: The higher of these must be used:
A: a borrower must be in the payment plan for the payment amount to be used.
A: however, the updated payment amount will need to be included on a recent monthly statement.
The content of this website is intended for licensed third party originators or brokers only and may not be duplicated or disseminated to the public. Carrington Mortgage Services is one of the leading wholesale mortgage lenders.
Government Agency Approval | FHA Non-Supervised Mortgage Approval #: 24751-0000-5 | VA Automatic Lender Approval #: 902324-00-00