The Truth about how Student Loans can affect you getting a Mortgage

Mortgage and Lending with - Legend Lending NMLS #293883

When getting a mortgage many items are taken into account. These items includes your income, credit scores, assets, expenses, etc. One major expense can be if you have student loans. How mortgages address student loans is different than how we think of them. Such as, if your payments are deferred we take that as we do not have student loan payments. But for a mortgage they consider what the future student loan payment will be. And they address what that payment would be from a worse case stand point. Here is how your student loans are addressed when getting one of the different mortgage types:


     FHA Loan- When getting a FHA loan you need to know:

  • In the past if your student loan payment was deferred for over 12 months you could ignore the payment. THIS IS NO LONGER TRUE. Even if your payment is deferred a payment must be determined

  • When calculating a payment you must go with the highest payment of these 3 options: 1% of the account balance as the payment or the payment shown on the credit report, whichever is more. Or use the fully amortized payment during the loan. This means you will need to call your student loan company and find out what the highest the payment could go to.

  • If your payment has been reduced due to income or other factors, the future fully calculated payment must be counted


    VA Loan- When getting a VA loan:

  • If your loan payment is deferred for over 12mths, the future payment can be ignored.

  • If the payment is deferred for under 12mths, you must find out what that future payment will be.

  • If the payment has been reduced, due to income or other factors you can use that current payment. And not have to document future higher payment.


    Conventional loan- When getting a Conventional loan:

  • What the fully amortized/calculated payment must be determined

  • Even if the loan is deferred currently, the full future payment must be determined. Or the 1% of the account balance as a payment can be used if higher than the future amortized payment.

  • If following Freddie Mac’s underwriting guidelines you can use a reduced payment if documented.


  • USDA Loan- when getting a USDA loan:

  • Even if the payment is deferred, the future payment must be determined.

  • If the payment is based on an adjustable rate, reduced payment, income influenced payment the future payment must be determined or 1% of the account balance as a payment. Whichever payment option being the highest would be used as the future payment. You can get an exception for the lower future payment if the interest rate is fixed and is not to change over the life of the student loan


    Whew, that is a lot of info to remember. When getting a mortgage it is important to know the truth about how student loans can affect you getting a mortgage.


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David Krichmar 

Mortgage Banker NMLS#293883 

Legend Home Lending

LLC NMLS #229421

Has Written For Realtor Magazine, Houston Agent Magazine, Scotsman Mortgage Guide

Appeared On Fox Business


Named 5 Star Mortgage Professional 2013, 2014, 2015, 2016, 2017

Named Top Mortgage Professional 2010,2011


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If you are looking for a FHA, VA, USDA, Homepath, Conventional, Jumbo, Construction, FHA 203k mortgage in Fort Bend County, Sugar Land, Houston, Katy, Harris County, Brazoria County, Pearland, Richmond, Bellaire, West University, The Woodlands, Kingwood, Friendswood, Clear Lake, Galveston, Fulshear, Tomball, Spring, Conroe, Montgomery County or anywhere in Texas I am your GUY!  


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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Michael J. Perry 02/19/2017 05:49 AM
Mortgage / Finance
Texas Harris County Houston
The FHA Mortgage Group
Lenders & Realtors with a CONSCIENCE
VA Loan Group
USDA Home Loans
student loans
12 months
12 mths
future payment
income based

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Winston Heverly
Winston Realty, Inc. - Atlantis, FL

A nice informed post pertaining to an important subject matter. I'm glad I came across it in the archives.

Jul 23, 2016 10:30 PM #1
David Krichmar - Legend Lending - Sugar Land, TX

thank you Winston

Jul 25, 2016 01:57 AM #2
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

Yes, this is #1 reason that stops younger buyers to buy a house. More and more millenniums live with parents trying to pay off their loans. 

Sep 08, 2016 05:26 PM #3
David Krichmar - Legend Lending - Sugar Land, TX

Thanks Inna, sadly you are right

Sep 08, 2016 11:23 PM #4
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Fantastic Post ! I'm bookmarking this for future use !!! Thanks !!!

Feb 19, 2017 05:44 AM #5
David Krichmar - Legend Lending - Sugar Land, TX

Thanks Michael!

Feb 19, 2017 09:24 AM #6
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Thanks for clarifying these student loan issues as they relate to getting a mortgage.

Sep 10, 2017 08:02 PM #7
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