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Health & Fitness

"Student Loan Debts May have Killed the Deal"

I am in the process of doing a mortgage application for a couple that were recently married. The wife had a lot of student loan debt, so I decided to do the mortgage in the husband’s name only, even though he had limited credit, he qualified just fine income wise.

 

The underwriter wanted copies of canceled rent checks, because of the limited credit, which they said were available. As it turns out they were living in an apartment that she had rented before the marriage and all of the rent had come from her checking account.

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We submitted the cancelled checks with a letter of explanation, explaining all this history, but was afraid that they would want her added to the mortgage to connect all the dots. I explained my concern about the student loans and they were deferred for less than a year, which means a payment will need to be included into a debt ratio. We didn’t have an option and had to add her to the application and we had a debt ratio problem.

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We have gotten a letter from the employer as to what her income would go up to, once her degree was gotten later this year. The odds of getting an approval are less than 50/50. Not because the underwriter doesn’t want to do the mortgage, it is because the lender may not be able to sell this mortgage in the secondary market.

 

 

These folks have great credit, good jobs, jobs that will allow their careers to grow so they can earn more income, but that may not be enough. 

 

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