Problems with financial aid docs for FHA mortgage?

[kdburton]

Anyone else having problems getting acceptable loan payment information documents for underwriters when you're applying for an FHA loan?

Heres my problem.... They require some sort of document that says exactly what your payments are going to be on your student loans for 12 calendar months from the time of closing. I currently am set up with an Income Based Repayment (IBR) plan that I applied for last month. Since I don't have an income yet (I don't start residency until the end of this month) my monthly payment is $0. The direct loan servicing people require an update of income once per year and the only documents they would accept was tax returns or some pay stubs (not a resident contract stating my salary). The problem is that I cannot request forbearance because of my current $0 monthly payment and being granted forbearance is the only way direct loans can provide documentation of what my payments (or lack thereof) will be for an entire year. Apparently there is a way to get some executive order for a supervisor there to write a special letter saying what my payments would be for the entire year given what my IBR will eventually be when I submit tax documents but it will take at least 4-6 weeks to get that letter and I will already have started residency by then. Anyone else running into this kind of problem when applying for an FHA mortgage?

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[phipsi]

It's one of the harder things to get. Contact someone who does doctor loans you won't have that requirement.

 

[kdburton]

It's one of the harder things to get. Contact someone who does doctor loans you won't have that requirement.

Hmm I will have to take a look into these programs. For some reason I thought they weren't available in MI

 

[live2theedge]

I am a Intern. We have been battling this the entire year. We are trying to refinance with 40% equity in our house (based on appraisal). The refinance part is a problem for us at Bank of America. If it is not a refinance, credit score is above 720. You can qualify for a 95% loan. That is what they say on the surface anyway. The physician loan at Bank of America does not take into account your student loans and doesn't require a pay stub. I will say that BOA was very unpleasant to work with. We were told In February we would get the loan. I finally set a deadline of June 1 for them to make up there mind. They asked for ridiculous statements,letters etc. many of which they were already given. They were just dragging us out. With no concern for what they were doing to us. They denied us because we couldn't give them anymore proof than a letter stating the loans would be deferred for 3 years. It has been very frustrating to say the least.
Good Luck.

 

[SassyCat]

I had a very difficult time with underwriters closing on an FHA loan. They would not count my income because I did not have a pay stub and therefore could not verify my income. (you may also run into this problem) Even though I submitted my contract and letter verifying my income, they still wouldnt let me close on my own until I could produce a pay stub.

As far as proving my student loan repayment amount, the underwriter accepted a letter from my financial office stating that I was eligible for forbearance but could not apply until after the six months grace period. I also sent the direct loans website and screen shot showing the loan repayment timeline. This was my proof that it was really difficult to obtain the "one year loan repayment amount" and they seem to accept it.

FYI- My financial aid office didn't really want to get involved or write the letter but after persuasion and begging, they finally did.

Ultimately, I did close on my loan last week but I did have a co-signer (who doesnt live in the house which is why I did FHA and not doctors loan). I also had the other issue of having a condo in my name that I am renting and not selling.

 

[kdburton]

I had a very difficult time with underwriters closing on an FHA loan. They would not count my income because I did not have a pay stub and therefore could not verify my income. (you may also run into this problem) Even though I submitted my contract and letter verifying my income, they still wouldnt let me close on my own until I could produce a pay stub.

My underwriter was apparently ok with accepting a copy of my contract for income but my loan officer said that another client of his, who is one of my co-residents, was unable to get his income qualified that way with a different underwriter at the same bank. Kinda BS if you ask me... Also after I got denied i started calling around and had one other loan officer tell me I'd be unable to get approved unless I submitted pay stubs which wouldn't happen until July something at the earliest.

As far as proving my student loan repayment amount, the underwriter accepted a letter from my financial office stating that I was eligible for forbearance but could not apply until after the six months grace period. I also sent the direct loans website and screen shot showing the loan repayment timeline. This was my proof that it was really difficult to obtain the "one year loan repayment amount" and they seem to accept it.

Yeah I ran into this problem and the end result was my mortgage getting denied yesterday. I wish I would have thought about getting my financial office to write a letter like that. Basically what it came down to was that the only way they could approve me was if i waited until Dec (when my med school loans go into repayment) and then request forbearance at which point they'd know what I have $0 payment for 12 months... at least on paper.


Fortunately after lots of calling around and searching I was able to find a bank that I THINK/HOPE will be able to help me. They have a Doctor Only Loan program that is $0/0% down with no PMI (!!!!) and I got a 4.75% interest rate. They allow you to negotiate with the seller to contribute up to 3% of the total purchase price towards closing costs, so you need to cover any remaining closing costs. Of course you need to escrow your taxes and homeowners insurance into the mortgage. The awesome thing about this loan officer I was dealing with was that she was able to calculate what my student loan payment was (which is currently on the income-based repayment play) and that was something that my prior lender was unable to do. All the prior lender said was that if I had loans in grace period ($0 monthly payment) then they would have to calculate a monthly payment for their records by using 1% of my loan balance. Well with $160k worth of med student debt thats a rather large payment that made my D:I too high to get qualified or even get a co-signer qualified for me. Anyways I have obviously not closed yet given that I've only applied for this mortgage today but they calculated my D:I at 22% and with my credit score and income the woman said I should have no problem getting the loan. This is not an advertisement, but so far I'm already happy I've found this lender. Huntington Bank out of OH may be worth looking into if you're in my situation.