Did you know that when it comes to VA loans, deferred student loans play a significant role in determining a borrower’s debt ratios? It’s true!
If a student loan is deferred for over 12 months, the borrower’s student loan payment is not included in the qualifying debt ratios. This can be a huge advantage for borrowers who are still in school or have recently graduated and are not yet required to make payments on their student loans.
On the other hand, if a student loan is deferred for less than 12 months, the borrower’s student loan payment must be included in the qualifying debt ratios. This means that borrowers with shorter deferment periods may have higher debt ratios and may need to meet stricter requirements to qualify for a VA loan.
Understanding these guidelines is crucial for both borrowers and lenders when it comes to applying for a VA loan. By knowing how deferred student loans impact debt ratios, borrowers can better prepare themselves for the loan application process and ensure they meet the necessary requirements.
In addition to deferred student loans, there are other important factors to consider when applying for a VA loan. These include minimum credit score requirements, maximum debt-to-income ratios, and property type eligibility. By working with us a knowledgeable company that understands VA loan guidelines, borrowers can navigate the application process with confidence and increase their chances of approval.
VA loans offer unique benefits for veterans and active-duty service members, including the flexibility to exclude deferred student loans from debt ratios. By taking advantage of these benefits and understanding how deferred student loans impact qualification, borrowers can achieve their dream of homeownership with a VA loan.