Buying a Home With Deferred Student Loans

Bring the current repayment information

Your credit report may not tell the whole story. Provide the latest servicer statement, repayment-plan details, and the status of any deferment or forbearance.

A documented income-driven payment and a temporary pause in payments are not interchangeable. The lender needs to identify the actual arrangement before calculating your debt-to-income ratio.

Ask which mortgage rule is being used

For Fannie Mae loans, a verified zero payment under an income-driven plan can be treated differently from a deferred loan or one in forbearance. Deferred or forborne loans can require a calculated payment based on the balance or documented amortizing terms.

Other mortgage programs have their own requirements. A student-loan calculation from one program should not be copied into every alternative without checking it.

Compare options before paying down a balance

Using cash to reduce student debt can change both your debts and the funds available for closing. Ask us to compare those effects before moving money.

The useful question is whether a proposed payment or repayment-plan change improves the complete financing picture. Keep enough time for accurate servicer documents and any needed credit-report updates.

Start with these documents

• Current statements for each student loan.
• The repayment-plan approval or payment schedule.
• Any deferment, forbearance, or consolidation documents.
• Your available cash and target housing-payment budget.

Sources and program details

These references support the program details discussed above. The program selected for your loan and its current requirements control your application.

• Fannie Mae: student-loan payment treatment