G0S2

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Oct 11, 2003
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My wife and I have been building a home with a local builder since January and have been approved for a FHA loan via the builders mortgage Co. We were set to close June 17 and all I had to do was demonstrate that my student loans were in deferment for one year from closing by the month (June 2009-June 2010). Well, many of my lenders have a grace period that you cannot get out of and where you cannot file for deferment. Since I could not defer all my loans due to the grace period, we cannot get the FHA loan and close. FHA will not accept forbearance, which I can easily obtain. In addition, come July 1, deferments are out, which means no FHA loan for recent grads with loans.

Does anyone have any experience with this? We are devastated to say the least.
 

dragonfly99

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May 15, 2008
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wow. Sorry about your trouble. Does your wife have any kind of income/job?

If you are graduating now/this year, you probably could get one of those "doctor loans" (Compass Bank/Physicianloans, etc.). They aren't the greatest loans ever (tend to have higher interest and fees than some others) but they would probably give you a loan if you are becoming an intern. If you are in the Southeast, then I believe Suntrust still does physician loans as well.

I don't know the answer to your specific problem w/FHA, since I went ahead and allowed them to consider my student loans/loan payments when I applied for an FHA loan. I was accepted, but that's probably b/c my required payment is only $520/month and I had a fellow/PGY4 salary.
 
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G0S2

G0S2

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15+ Year Member
Oct 11, 2003
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TX
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wow. Sorry about your trouble. Does your wife have any kind of income/job?

If you are graduating now/this year, you probably could get one of those "doctor loans" (Compass Bank/Physicianloans, etc.). They aren't the greatest loans ever (tend to have higher interest and fees than some others) but they would probably give you a loan if you are becoming an intern. If you are in the Southeast, then I believe Suntrust still does physician loans as well.

I don't know the answer to your specific problem w/FHA, since I went ahead and allowed them to consider my student loans/loan payments when I applied for an FHA loan. I was accepted, but that's probably b/c my required payment is only $520/month and I had a fellow/PGY4 salary.
Thanks.

Unfortunately our student loans are rather huge so they only accept them to a certain point before it runs into the income/debt ratio. The problem is, I can't defer the rest due to a grace period of 6m and after July 1, loans can no longer be deferred.

Compass Bank is our next option and they are based in TX. One of the reps sponsored one of our Match week events and spoke to our class. They do run at a higher rate (7-7.5%) with no PMI or down payment. Once the FHA is officially dead, I will give them a shot.
 

dragonfly99

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May 15, 2008
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No down payment could be helpful.
Keep in mind that the no PMI really doesn't matter/help, because if you are paying 7-7.5% you are paying up to 1.5-2% greater than market rate for your loan, so you'll be paying the extra $100 month (or whatever it is) as interest rather than as mortgage insurance. Same difference...you are still out that amount of money.