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Coming out of Deferment & Mortgage Question
January 18, 2018
1:40 pm
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January 18, 2018
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Hi All,

I am so very thankful I found this forum. My loans are set to come out of deferment in May. I may be able to apply for deferment again, but I dont think I really need to. Long story short, I was the first in my family to ever attend college, and learning came very naturally to me. As a young 17 year old in college (emancipated), I signed whatever form they put in front of me. This was great! I was getting an education! Fast forward years later and 3 degrees later……. I am in debt for $177k. As a 30 something, I now realize oh my, all those forms I signed… I have to actually PAY for. The good news is I work for a 501 which qualifies me under the PSLF program (thank god…) I have done nothing to my loans. I want to start repaying them under IBR ($125/mo) so that my work history will start counting towards the 10 years of qualifying payments and eventual forgiveness. However, we also just started looking at purchasing our first home….

The first mortgage broker I called (Regions bank in Florida, where I live), literally LAUGHED at me. Why? My student loans. He said a bunch of things I honestly didnt (dont) understand, but essentially as they were in deferment, he had to count 1% of my overall loans, which he estimated at 200k (not true, its 177k…) so my DTI starts at almost 60%… The only other debt we have at all is a car loan which will paid off soon. I was crushed. Fast forward (I dont stay down long..) to today – and another gentleman I spoke to, said that he could qualify us for a loan after I resolve 2 items on our report (no biggie) and said to me it is totally normal now for people to have in excess of $200k in student loan debt (Oh I guess Im not a martian from Mars…)

Heres the thing. I dont know what to do – at all – Ive never touched these loans. Do I consolidate? Do I need to? Should I just enter into IBR? Whats the difference? Will IBR hurt our chances for a loan? I read somewhere in my start of researching that even under IBR sometimes they still have to use 1% because it isnt a set payment? I read somewhere else if the payment reports on your credit report, they can use that? Why wouldnt it report on a credit report? My loans are all serviced through Nelnet. Below is what it shows for mortgage verification. Would that change (the regular monthly payment amount) under IBR?

Thanks for your feedback

Account Summary
Regular monthly payment amount $1,676.20
Past due amount $0.00
Due date 05/28/2018
Capitalized interest $12,602.02
Outstanding principal balance $155,703.60
Accrued interest $21,333.57
Outstanding fees $0.00
Current balance $177,037.17

January 18, 2018
2:22 pm
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Indiana
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May 3, 2014
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There is a lot going on here. I count 3 big issues:
1) Getting things rolling to make sure your time working is counting toward PSLF
2) Enrolling all of your loans into an income driven plans for mortgage eligibility
3) Coming up with a strategy

Not long ago I was working for the government aiming towards PSLF and trying to buy a home, so this situation is quite familiar. I think that odds are pretty good that you are not the only one in this situation, so I’m going to go ahead and write more of an in depth article on the subject. I’ll be sure to post a link to it here when it is done.

January 18, 2018
3:16 pm
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January 18, 2018
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That is wonderful! Thank you so much!

January 21, 2018
10:29 am
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Indiana
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May 3, 2014
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The article on these questions has be published. It can be found here: https://studentloansherpa.com/ibr-pslf-mortgages/

Hopefully it helps!!

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