New Help for Borrowers with Student Loans!




Fannie Mae requires that all deferred installment debt, including student loans not yet in repayment, be included in the calculation of the borrower’s debt-to-income ratio. In determining the payment for deferred student loans, Fannie Mae previously required that the lender obtain a copy of the borrower’s payment letter or forbearance agreement or calculate the monthly payment at 2% of the balance of the student loan. Research has shown that actual monthly payments are typically lower than 2%. In addition, many student loan repayment structures now use an income-based approach in calculating changes in the payment due over time. As a result, Fannie Mae is modifying the monthly payment calculation from 2% to just 1% of the outstanding balance.

All in all I think this is a great move by Fannie Mae and will help more borrowers qualify for a mortgage. Or help them qualify for a higher purchase price which is important in a market like the Austin metro where prices are high. 

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