I recently qualified for the IBR program.  I owe a six figure balance to Sallie Mae/Dept of Education for my veterinary school education.  For the next 12 months my payments are zero dollars.  I recently applied for a mortgage since my payments for a house will be cheaper than rent (and I would like to get started on my life) but my lender won’t give me a mortgage without knowing exactly what my payments will be when they start next year.  I feel like if Sallie Mae needs you to requalify every single year for the IBR program, does anyone ever get approved for mortgages while on IBR?  I know my income will never increase to the point that I will pay more on the IBR plan than the standard plan since my payments on the standard plan would be $3800 a month (more than my AGI for a month). I don’t know how to get this across to my lender?  I get a different answer every time I call Sallie Mae on this topic and I have decided to ask other people if they are experiencing this same thing? Thank you.

I have heard this problem from many borrowers.  In fact, 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.

Is it possible to apply for a 12 month forbearance while remaining on IBR? I realize you may not be considered in repayment during this time, but if it is possible, that may be a solution to being able to get a mortgage.

Questions 32 & 42 seem to suggest this is possible. http://studentaid.ed.gov/students/attachments/siteresources/IBRQ&A_template_123109_FINAL.pdf