Student Loans and Home Purchase

X-Fams and X-Fans business was so hectic in the last year that it’s been a while since I have reached out to you. This is the first of many blogs to come. Oh – for those of you wondering what X-Fams and X-Fans are –

“X-Fams – those families Xclusive Realty helped to find a place to call home. X-Fams are the best X-Fans!”
Some of you bought new homes, foreclosures or resales. Some of you up-sized, downsized or just simply relocated. A majority of you moved into the Charlotte area and are renting for a year or so to familiarize yourself with this wonderful City of Charlotte.

Today I want to share something with my renters who may have deferred student loans and are thinking about purchasing a home using FHA funds.

“Effective June 30, 2016 underwriters will no longer be able to exclude monthly student loan payments for FHA loans in regards to qualifying and debt to income ratios. In the past, student loan payments in deferment for at least the next 12 months ( 1year) could be excluded from debt-to-income ratios. FHA will now require these payments to be included into the borrowers monthly debt.  If there is no monthly payment reported, lenders will use 1% of the loan balance for the monthly payment.  What this means?  Pre-qualified amounts could be much less for home buyers that have significant student loan debt.”

The student loan folks noticed after 12 months of deferments, buyers neglected to pay their student loans – hence the new rule above.

Always consult a mortgage professional.  Be pro-active, start a year in advance and know your credit score – view your reports – all 3 of them!

Let’s attend community colleges, only take the funds you need, pay as you go (if you can) or contact a consultant who can find tons of funding resources that are available to students heading out to college. A source I know has proven itself is Intellectual Equity. They have successfully found young people funds.

I know, I know – I started out talking about new mortgage rules and ended with finding young people funding for college – believe me folks, if you think about it, it’s all tied together.  If we want the next generation to join the dream of home ownership, let’s teach them how to make wise decisions and be good stewards of what is available to them.

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