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  • Loans that don't count student loan debt in the debt to income ratio

    Hi, I have a potential client who has significant student loans, having just finished her PHD a few years ago.

    I recall reading about special loans for Doctors, that do not count the student loans against the debt to income, they don't require mortgage insurance, and they have up to 100% loans. It seems that might extend to others that are significantly encumbered by student loans with promising financial futures.

    I remember BOfA used to do them. Anyone have any ideas?
    Kim Knox
    Principal Broker, Owner, ABR, GRI, PME, A-REO, REDCpro,
    541-899-7222
    Licensed to conduct Real Estate in the State of Oregon

  • #2
    Re: Loans that don't count student loan debt in the debt to income ratio

    Originally posted by Kim Knox View Post
    Hi, I have a potential client who has significant student loans, having just finished her PHD a few years ago.

    I recall reading about special loans for Doctors, that do not count the student loans against the debt to income, they don't require mortgage insurance, and they have up to 100% loans. It seems that might extend to others that are significantly encumbered by student loans with promising financial futures.

    I remember BOfA used to do them. Anyone have any ideas?
    Hey Kim, send me an email the next time you have a mortgage question, I'll get to you quicker. I know of the Doctor loans that BofA used to do, don't know if they still do them but I'm familiar with what you're talking about. I don't know of any lender that does not count student loans against the debt to income ratios, it's possible that you can find a local portfolio lender that would look at the borrower differently seeing as how they wouldn't be selling the loan to fannie/freddie. I would probably look to structure the loan differently, I know you've been around a while, but what about adding a non occupant co-borrower to offset the DTI? Are the student loans deferred or is she now paying on them because she's finished school?
    Jesse Gonzalez, Broker/REALTORŪ
    Archer Realty
    DRE License#01855372
    NMLS MLO#278103
    707-583-3666

    Comment


    • #3
      Re: Loans that don't count student loan debt in the debt to income ratio

      Hi Jesse, thank you.

      Adding a co-borrower would disinterest the Buyer. The student loans are not deferred, she has been paying on them for roughly 2.5 years. Counting her student debt, she is only capable of borrowing roughly $215K which is not going to get her the house she requires.

      I remember the BofA loan. I think it offered a series of benefits. First, not counting all of the student loan debt against the debt to income ratio, no mortgage insurance, and low down. Even with this Buyer's 805-815 credit score, I cannot find an alternative for her.

      The portfolio loan idea is a good one that I had not considered. My gut feeling, is that this Buyer needs to wait. it is just a shame for her to be paying rent near what her house payment would be.
      Kim Knox
      Principal Broker, Owner, ABR, GRI, PME, A-REO, REDCpro,
      541-899-7222
      Licensed to conduct Real Estate in the State of Oregon

      Comment


      • #4
        Re: Loans that don't count student loan debt in the debt to income ratio

        Sounds like you've worked all the angles. I'd be interested to hear what her income is currently and how much she's paying on student loans, I'd assume she has a very good paying job with her degree, but you never know these days.
        Jesse Gonzalez, Broker/REALTORŪ
        Archer Realty
        DRE License#01855372
        NMLS MLO#278103
        707-583-3666

        Comment


        • #5
          Re: Loans that don't count student loan debt in the debt to income ratio

          $100K Gross, $57K Net, $1200 monthly payments on student loan debt, minim due is $800.
          Kim Knox
          Principal Broker, Owner, ABR, GRI, PME, A-REO, REDCpro,
          541-899-7222
          Licensed to conduct Real Estate in the State of Oregon

          Comment


          • #6
            Re: Loans that don't count student loan debt in the debt to income ratio

            I'm pm'ing you
            Jesse Gonzalez, Broker/REALTORŪ
            Archer Realty
            DRE License#01855372
            NMLS MLO#278103
            707-583-3666

            Comment

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            Kim Knox Principal Broker serving Jackson County Oregon. Find out more about Kim Knox

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