Hi everyone.

I’ve been hearing horror stories about folks trying to get a mortgage on IBR. Has anyone had any luck? If so, how did it work? Did you have to do anything special?

Thanks!

Emily?  Student loan borrowers have had mortgage qualification issues forever, and especially now with the pendulum having swung back in the direction of cautious underwriting with lots of documentation.  Some borrowers have supplied a letter or statement to the mortgage company indicating the nature of their repayment plan (IBR), and the way payments are calculated.  It will always be the case that the mortgage company looks at your total debt to income, not just your monthly payment, so it’s tough.  When I got a mortgage years ago, it was all I could do to get them to believe that Duke would be helping me pay my student loan payments for a while.

Thanks, Heather. It’s a rough situation. So many young, educated families won’t be able to afford a house. It’s almost like getting a higher education now doesn’t guarantee you the American dream. It keeps you from it.

I recently qualified for a mortgage and I am using the IBR. Both mortgage companies only cared about my MONTHLY debt ratio, not the total amount. I actually dont even remember providing them with my total loan balance. I make around $45,000 and qualified for a $250,000 mortgage with two different mortgage companies. I didn’t end up buying the house, but I was in contract, so I know that I can qualify in the future if I want. Take that for what its worth…just my experience.