One of the largest hurdles for first time home buyers we encounter is student loans, we have developed some strategies to help you overcome this obstacle and enjoy the benefits of home ownership.

There are a few types of student loan repayments that could be listed on your credit report.  Credit score does matter, when it comes to overcoming student debts.  With a great score you can possibly use the IBR (explained below) instead of the full repayment amount.

Deferment, this means your loan is not in the repayment period, however it still very well may be charging you interest adding to your balance.  The fact it shows payment of zero, does not help, it can hurt you.  If your loan is in deferment and it shows no payment is due, then 1% of the outstanding balance is what the lender would use to calculate out what your monthly liability would be.  Deferment does not mean you can ignore the payment.

IBR (Income Based Repayment) If you have entered a repayment plan that is lower than 1%, you have most likely agreed to this program.  In the case of an FHA loan, 1% would still have to be used, however for a Conventional Loan, whatever appears on the credit report is the number that would be utilized.  If no payment appears you would have to use 1%.

If you’ve struggled getting these questions answered, you probably been speaking to the wrong Lender.  We can show you how to contact your student loan servicer and get a handle on what your payments are and if you have other options that fit your budget.

Chris Conlon cconlon@afncorp.com 704-609-5017

Bob Parm bparm@afncorp.com 704-778-2603