Mortgages and student loans

Uh....am I imagining things or did the post on changes to mortgage rules re: student loans disappear into cyberspace?
I think I saw that someone posted a few more replies but I didn't get to see them.
I'm curious to know if anyone else has run across this or has more details. We will be applying for a mortgage in the next 6-8 months and I'm hoping this won't be a problem. It seems like there is always something with these loans.... (Of course, I say that realizing medical school would have never been an option without loans....).

When we applied for a home loan about a year ago we thought my husband's lack of school debt would be a real plus. Turns out they didn't care a hill of beans that he didn't have any because what they look at is your current debt/income ratio and since we wouldn't have been paying back any med school loans (deferment until end of training) anyway, it didn't matter. I could be wrong about that but I do remember the loan officer not being too impressed with my husband's lack of med school debt especially since we had credit card debt - something that is not deferrable.

Anyway, the thing to keep in mind is to really find a good mortgage company and shop around for rates as you would any other major purchase. They usually don't want you to pay more than 30% of your monthly income towards the mortgage payment.

Good luck - it's such an exciting time!

mortgages/student loans

Hi,
My name is Renee, I have not been around for a while, but finally had a few minutes to come back and see what was happening.....anyway--just had to reply to your post--
My husband is an Internist, two and 1/2 years in a practice owned by the local hospital--anyway--we had NOTHING two years ago, no down payment, no savings, nothing, PLUS we had about 100K in student loan debt. We were able to get a no money down loan for a 225K house based on my husband's contract/salary with the hospital, he hadn't even started working yet. And not to mention, his credit rating was not so great. Also, I was not going to be working (SAHM) so it was based soley on his ability. A few things, the hospital was paying 15K per year for five years on his loans (sign on bonus) and they were able to advance us a month's salary to cover the "money in the bank" thing. Here are two companies that you may want to check out for a mortgage----
GMAC (this is who we used) 1.800.888.4622
Countrywide home loans 1.800.570.9888

The way it works is that you take two loans, the second with a higher rate. We did this for a year and refinanced to the going rate. But if you have money down, you are in a much better position.

Also check out physician service loans, they specialize in loans for doc's and doc's to be.....
Good Luck!!
Renee

Nellie, you aren't imagining things, it was REALLY here at some point! I think it was Kelly that posted she had spoken with a mortgage broker or lender and they had mentioned that new rules will be coming into play soon. They may have an affect on the ability for residents/interns to get home loans with the mountain of student loans. I have been trying to locate some info on this but haven't found much as of yet. It seems that when I look for info about the changing of how lenders are going to look at the defferred loans all I find are more places to get a loan! No one has any info about the process of the lending institution delving into your Credit Bureau Report to see what is there. Guess it would require a phone call.

I may call our bank to see. When we got our loan, a little more than two years ago, we used Bank of America and they had the no $ down and no PMI for physicians as long as you have over $100K in their bank. Pretty easy to do with a home loan and checking/savings account. Anyway, I have found lots of other places(mostly online) with the same/close to the same advantages.

I did get an answer about this today...for us anyway. The mortgage broker I spoke with said that as long as the loans will be deferred (or in forebearance) for greater than three years, they will not count as part of our debt. We will need a letter from the student loan lender indicating that the loans are in forebearance and will be for that length of time (or could be under the condition that he remain in the residency program, I guess). Since the derm residency will be for three years, I think we will be ok on this. Yeah!

[Amiens]

I'm curious to see how this will affect us after Matt is done. Granted he will be making about 6 times as much as he is now, so hopefully we will be able to get a home loan.

How does it work when you're done?

Crystal

Crystal,
This is my rather uninformed opinion....so please take it as such.
When Matt is done you will have to start paying off student loans and that will be part of your debt "picture" and will play into the amount of loan you get, rate, terms, etc. As you said, he will be making quite a bit more than he did as a resident so I'm sure you'll be fine. I think that the problem is that a resident's salary combined with a resident's debt makes them less likely candidates for a loan if the student loans are considered (unless the spouse has an income and/or you have a significant down payment). If the student loans are in deferment and the lender doesn't consider the loans then it is easier to get a mortgage.

You might have to wait for him to have an offer letter or start in a job at the new salary to get the amount of loan you want, but I'm not sure.

After reading this post, back before the mysterious disappearance of the original, I called Bank of America...since that is where we have our mortgage.

I just got off the phone with them, and they have changed their rules on what they call 'The Doctor Loan'. Here is what I was told, if the student loans have been deferred and are within 10mths of being "activated to repayment"....they will be included the process of originating the loan. The just changed this about 5-6 months ago. That really sucks for us, since DW is actually in her 4th post-graduate year and her loans will come due since the consolidation next Sept. We would be in the market for a house next Oct-Nov area. It doesn't mean that we couldn't get a home, but it would cut the amount that we could spend on one by nearly $70K. For new residents it changes the loan process some but it is still a pretty good way to go.
I am not sure if this clears up anyone elses questions, but it gave me the information that I needed! Again, this is only from Bank of America....I would think that other banks have some good loans for doctors in training as well...it would be good to check around.