The Federal Housing Administration (FHA) will make a major change in mortgage qualification and student loans in September of this year – one that could negatively affect many potential buyers.
Previously, borrowers with a 12-month deferment or more on student loans did not have these costs counted against them. After Sept. 14, 2015, all student loan payments will need to be included in the qualification process, regardless of whether or not they are in deferment. If payment amount cannot be established, two percent of the balance will be counted.
“Under this new underwriting rule, even if you are not currently required to make payments for an entire year, we will still have to count this as a liability against you,” said Steve DiMarco, president of Key Mortgage Services, Inc. “My advice to anyone who is on the fence about buying and also has deferred student loans: act now to avoid this hassle.”
For more information about whether or not this change will affect your buyers, please contact a Key Mortgage loan officer.