Student Loan Payment – Conventional Financing
Student Loans For all student loans, whether deferred, in forbearance, or in repayment (not deferred), the lender must use the greater of the following to determine the monthly payment to be used as the borrower’s recurring monthly debt obligation:
- 1% of the outstanding balance (which is down from 2% pre-March 2015); or
- the actual documented payment (documented in the credit report, in documentation obtained from the student loan lender, or in documentation supplied by the borrower).
If the payment currently being made cannot be documented or verified, 1% of the outstanding balance must be used.
Exception: If the actual documented payment is less than 1% of the outstanding balance and it will fully amortize the loan with no payment adjustments, the lender may use the lower, fully amortizing monthly payment to qualify the borrower.
Loan Officer, NMLS # 729612