Weird situation with student loans…

Tips and Deals Forums Home Mortgage Weird situation with student loans…

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      I am looking for some insight from you guys and gals. I’m purchasing a townhouse on an FHA loan through the IHDA program here in Illinois. To get the free 3% down, you have to meet certain criteria (credit score, DTI, price range). I meet all of the criteria, except DTI. The reason is because of my student loan consolidation. Now, bear with me as I try to explain. My car payment is $400. I can restructure that loan at $260 a month with no extra money down. My student loans are as follows: Private loan 1 payment $80. Private loan 2 payment $100. Dept of Ed loan payment $161 and consolidated loan payment $142.

      Now, I’m in the process of consolidating the DOE loan and the “special” consolidation loan, but they are having issues with how to code the loan and the system is erroring out. It’s as problem of the DOE to get resolved and then my consolidation (second consolidation) will go trough. This would take my $161 payment and the $142 and combine them for a payment of $191. I already know the $191 is what my payment will be.

      My question is, how will the underwriters view this? I’ve been told that I either need to get my car under $240, or get the student loans consolidated before I can get down below 45% DTI. After car restructure and student loans I’ll be at 41%.

      I was also told to have my current lender for my $142 payment put me on forbearance until the consolidation goes through, which wipes out that $142 and puts me well under.

      Anybody have any clue as to how underwriting would view this situation?

      Thanks in advance and I hope I’m not too confusing!

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