How are Student Loans calculated for USDA Mortgages?
When qualifying for a USDA Mortgage, your student loans and their balances will be calculated into your Approval.
There a two types of repayment for Student loans: Fixed and Adjustable.
If you have a set payment that never changes and will pay the off the student loan balances in a set amount of time (10 years, 15 years, 20 years, etc), then you have a Fixed Payment Student Loan.
If you have a student loan payment that increases over time, then you have a Graduated Payment Student Loan. If you have a payment that adjusts with your Income Level, then you have an Income Based Repayment (IBR) Student Loan. Both the Graduated and IBR are Adjustable Rate Student Loans.
Fixed Payment Student Loans
The fixed student loan payment listed on the credit report is used for qualifying.
If there is no payment listed on the credit report or if the payment is deferred, then 1% of the student loan balance is used for qualifying
Adjustable Payment Students Loans
1% of the balance of the student loans is used for qualifying, no matter what payment appears on the credit report or on the student loan statement
All Deferred Student Loans (Fixed or Adjustable)
1% of the student loan balance is used for qualifying