When calculating a student loan payment on a VA loan there are various rules to pay attention to as far as what monthly payment is counted on that student loan debt.
If written evidence shows the student loan debt will be deferred at least 12 months beyond the closing date, no monthly payment is counted.
If a student loan is in repayment or scheduled to begin within 12 months from the date of a VA mortgage loan closing, the lender must consider the anticipated monthly payment in calculating the debt-to-income ratio. A payment is established by calculating each loan at a rate of 5% of the outstanding balance divided by 12 months.
Example: A VA mortgage borrower has a $40,000 student loan balance, you multiple it by 5%, which equals $2,000. Then $2,000 is divided by 12 months to equal a monthly payment of $166.67.
If there is a loan payment reported on the credit report for a school loan that is greater than the payment calculation above, then the lender must use the payment from the credit report.
If there is a loan payment reported on the credit report for a school loan that is less than the payment calculation above, the mortgage lender either has to count the higher payment or an order to count the lower payment it needs to document the lower payment with a statement from the student loan servicer reflecting the lower loan terms.
Mortgage guidelines have the ability to change at any time, so always talk to a well-reviewed mortgage loan officer to make sure you understand the current guidelines and how they might apply to you.