Deferred Student Loans Now Count! It used to be that student loans that were deferred 3 years or more did not count against you in your debt ratios. Not anymore…
Now even if your student loans are deferred for longer than 3 years, on a Conventional loan the underwriter will count the debt against you. On FHA loans they will not count the debt against you on student loans deferred for more than 3 years, but I am guessing FHA may follow the lead of the Conventional loans and they may change their policy soon too.
And there are different formulas for each loan type to calculate a monthly payment on deferred school loans. A common example would be taking the balance of the deferred school loans times 1%. For example:
$50,000 deferred school loans
$50,000 x 1% = $500/month
$500/month is what the mortgage lender may have to count against you in qualifying for a mortgage.
This is another example of the continued tightening of the underwriting guidelines. Expect to see more and more tightening, it will get worse before it gets better.