Hello;

Thank you for this invaluable website.

I am currently enrolled in IBR, and married. We file our taxes separately and I currently have a very low payment
due to my being unemployed.

My spouse is trying to buy a house. She has adequate income and credit. A problem is that because we live in a Community Property state, my financial info. must also be provided to the mortgage company.

They want me to be able to show that I will still have my low payment with IBR one year after closing on the new house which is August 2016.

My issue is one of timing. My current IBR “cycle” has me coming up for renewal/reapplication in April 2016.
I need to show “Deferment” (their term not mine) until August 2016.

I have provided everything I can, including a detailed explanation of how even if I become employed in April 2016 since it is based on AGI I would still have a low payment, etc.

The loan officer wants more though.

Can an IBR “cycle” be modified to have it end later than the standard 1 year? Anything else I can do about this matter?

Thanks So Much. 

Ive been looking into this issue for months now, as I will be preparing for the mortgage process shortly. My understanding is that it will depend on the type of mortgage, FHA vs Conventional etc. Most conventional loans will not accept IBR payments, as they want a fixed payment, and will just use 1% of the total balance as your payment (10,000 owed = 100 a month). FHA is more lenient and usually accepts the IBR , though there may be changes to that coming in September. Sounds like they are taking your payment as a deferred loan. I dont think you will have luck proving what the payment will be.

This is about the best info you will be able to find.

http://ncfhaexpert.com/first-time-homebuyer/student-loan-ibr-mortgage-qualification-2014/

Thanks for the quick responses.

It is appreciated.

Chirojosh - 13 July 2015 11:40 PM

Ive been looking into this issue for months now, as I will be preparing for the mortgage process shortly. My understanding is that it will depend on the type of mortgage, FHA vs Conventional etc. Most conventional loans will not accept IBR payments, as they want a fixed payment, and will just use 1% of the total balance as your payment (10,000 owed = 100 a month). FHA is more lenient and usually accepts the IBR , though there may be changes to that coming in September. Sounds like they are taking your payment as a deferred loan. I dont think you will have luck proving what the payment will be.

That is not correct.

Conventional loans are based on DTI. DTI is your fraction of income towards debt service on a per month basis.

Your TOTAL amount of debt is not factored into DTI, its your MONTHLY PAYMENT. So if your servicer says under IBR your payment is $50/month, that is what is used in your mortgage qualification process. It does not matter that the IBR payment is not a permanently fixed number.

Now, if you fail to provide your IBR payment amount, or monthly payment amount, then yes, they can use the 1% figure. But its not hard to get a letter from your servicer.

Reminder:  In the world of mortgages, the term “total debt”  = “your monthly total debt payment”