Posts tagged student loan debt
Student Loan Debt Flyer

Cherry Creek Mortgage Co., Inc., NMLS #3001. Debt consolidation does not pay off the debt, please consult a financial advisor regarding the effect of consolidating short term debt into long-term debt.

This material is informational only and not an advertisement to extend credit as defined by TILA/Regulation Z nor an application for credit as defined by RESPA/Regulation X. All applications are

subject to underwriting approval and determining applicant’s ability to repay. Not all applicants are eligible for or qualify for all loan products offered. All loan programs, terms and conditions are

subject to change without notice. Rates and terms are valid as of the date of printing/distribution.

Call me. Let’s talk about whether you

could benefit by refinancing now!

The broad burden of student loan debt.

Student loan debt impacts 44 million people in the United States and 41% report that they are delaying homeownership

because they find it difficult to qualify for a mortgage due to the impact of these loans on their debt-to-income ratios.

Help is on the way for homebuyers with student loan debt.

We are excited to announce that Fannie Mae is making it easier for home buyers with student loan debt to purchase or

refinance a home by implementing the following guideline changes:

• Changes to how debt-to-income ratios are calculated for borrowers with student loans

• Expanded guidelines that allow borrowers to pay off student loans without the typical rate increase that’s

required for cash out transactions

• Exclusion of student loan payments from debt-to-income ratio calculations when a borrower can verify those

payments are made by a family member with 12 month’s canceled checks

Now is a great time to connect with your clients who have been impacted by student loan debt to let them know

Fannie Mae is making changes to help them! Reach out to me today to learn more about how your buyers can benefit

from these new guidelines.

Help is on the way...

FOR BORROWERS WITH STUDENT LOAN DEBT

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Student Loan Hurts You From Qualifying

Will your STUDENT

LOANS hurt your

chances o f qualif ying

for a mortgage loan?

Outstanding student loan debt

Monthly payment

on credit report

FHA

LOAN

FANNIE

MAE LOAN

Student loan payment

used for qualification

$2,380*

$5,535 Additional monthly income needed

Student loan payment

used for qualification

$26

$61 Additional monthly income needed

1% of the outstanding loan

Current monthly payment

Cherry Creek Mortgage Co., Inc. NMLS #3001. This material is informational only and not an advertisement to extend credit as defined by TILA/Regulation Z nor an application for credit as defined by

programs, terms and conditions are subject to change without notice. Rates and terms are valid as of the date of printing/distribution.

*FHA requires lenders to use either the documented, fully amortized payment OR the greater of either the amount showing on the credit report or 1% of the outstanding balance.

**Assumes maximum debt to income ratio of 43%. Actual required debt to income ratio will vary by program selected.

.

If you have student loans and want to learn more about how those debts will impact your ability to qualify for a mortgage,

reach out to me today! I'll be happy to review your credit history, income, and housing needs, and I'll help you select the

right mortgage program for your unique circumstances.

CREDIT REPORT INFO

$238

$26

You worked hard to achieve your educational goals, but if you’re

like most individuals, you’re still paying for that degree with

monthly student loan payments. If you’re in the market to

purchase a home, your student loan debt can impact whether or

not you qualify for a mortgage loan, and it will dictate the loan

amount for which you qualify.

Mortgage programs can have vastly dierent rules about how

student loan debts are calculated, so it is important to work with

a lender who has access to a broad range of mortgage programs.

Check out the following example of how student loan debt

payments - and their impact on how much income is needed to

qualify - can change

from one program to the next....

As you can see, Fannie Mae makes it easier for home buyers with student loan debt to qualify for a mortgage by oering more

flexible guidelines around how student loan payments are calculated. Fannie Mae has also implemented additional helpful

rules around student loan debt that allow:

Borrowers to pay o student loans without the typical rate increase that’s required for cash out refinance transactions.

Student loan payments to be excluded from debt-to-income ratio calculations when a borrower can verify those payments

are made by a family member with 12 month’s canceled checks.

Read More
Student Loan Debt

STUDENT

LOAN DEBT?

Education costs have skyrocketed, causing many

individuals to take on significant student loan debt.

If you’re ready to purchase a home, that student

loan debt can have a big impact on your experience.

Mortgage lenders look at your income and your

debt payments while evaluating your mortgage

loan application. Some mortgage programs require

lenders to count your fully-amortized student loan

payment, while others allow the lender to use

lower payment amounts that may show on your

credit report. This difference could impact the size

of the loan for which you can qualify, and in some

cases it could represent the deciding factor in your

application being approved or denied.

$238k Outstanding student loan debt

$26 Monthly payment

on credit report

Student loan

payment used for

qualification

FHA $5,535

LOAN

FANNIE

MAE LOAN

$2,380*

Additional monthly

income needed to offset

the student loan debt**

$26 $61

Real-World Example of How Student Loan Debt

Impacts Income Needed to Qualify for a Mortgage…

1% of the outstanding loan

Current monthly payment

Cherry Creek Mortgage Co., Inc. NMLS #3001. This material is informational only and not an advertisement to extend credit as defined by TILA/Regulation Z nor an application for credit as defined by

RESPA/Regulation X. All applications are subject to underwriting approval and determining applicant’s ability to repay. Not all applicants are eligible for or qualify for all loan products offered. All loan

programs, terms and conditions are subject to change without notice. Rates and terms are valid as of the date of printing/distribution.

*FHA requires lenders to use either the documented, fully amortized payment OR the greater of either the amount showing on the credit report or 1% of the outstanding balance.

**Assumes maximum debt to income ratio of 43%. Actual required debt to income ratio will vary by program selected.

Read More