There are new FHA (Federal Housing Administration) policies that go into effect 06/15/15 that may cause issues for FHA loan borrowers with student loans. It will no longer matter if the student loans are deferred or not in repayment status, they must all be applied towards the calculation of the borrower’s debt. FHA will use the calculation of 2% of the student loan balance as a default payment for the debt to income ratios, thus on a $50k total student loan balance that’s $1,000 a month in debt. Unfortunately, for most FHA buyers, they may not qualify for a loan when this debt is calculated into their DTI ( debt to income ratio).
If you are considering purchasing a new home and these changes apply to you, you may want to act fast!! With these new changes coming and mortgage interest rates at low levels not seen since 2013, now is the time to purchase!! Not to mention that the FHA mortgage insurance rates dropped in January from 1.35% to .85%. Taking all of this into consideration and the increasing home prices . . …..let’s find you a new home today !!
The Laughton Team