Thank you for your response! I actually do want them to use the ICR payment because it allows the loan to still be fully amortized and the payment is wayyyy cheaper, thus helping with my DTI. I guess it was just me not being fully educated on the subject. I was under the impression regardless if I was on a PSLF or not, they still had to use the 1% for the FHA loan so the Extended Standard Plan gave me a lesser payment than the 1%. After reading your article I learned better. I realized that as long as the payment will allow the loan to fully amortize, they should be able to use that ICR payment amount. I actually emailed my Loan Officer with this information today and will be cancelling that Extended Standard Fixed payment plan first thing Monday morning with my Loan Servicer. Thank you for the information!!

I’ve been in a similar situation. Fortunately, most lenders are better about using options other than the 1% rule, because it doesn’t reflect the actual monthly cost of the student loans.

Is there a reason you don’t want them to use your current ICR payments? With most lenders, this shouldn’t be an issue… unless your monthly payment is $0 per month on your credit report. This article digs into the mortgage-related topics in a little more detail.

Best of luck to you!

Hi Gina,

Were you able to resolve the issue? If yes – how?

I’m in an almost identical situation and hoping you found a way forward.

Thanks!
Monica

I think you are doing the right things. Shopping around and speaking to multiple lenders is definitely the right move.

Thank you for the reply. I tried Quicken loan they initially said work with this issue all the time I even asked specifically about the new Fannie Mae guidelines but when I asked follow up questions, e.g. how much money I will need in reserves, the Quicken agent said that they would need to use 1% of the entire loan not the REPAYE payments.

Perhaps I did not say the correct things to the agent at Quicken loans.

When I called them I asked the agent if they work with student loan borrows, I then talked about my debt and my salary. I then asked if they will use my income based repayment plan (REPAYE) or if they would use 1% of my of my overall debt. Shen than said i have a credit score of 728 & I would qualify for $350,000 for a mortgage (which seemed way too high) after asking where I wanted to purchase (chester county PA). At that time she recommended I pay off my credit card debt. I then called her two weeks later to ask about reserve money and length of time for mortgage and she told me that I could only quality for a mortgage of about $100,000 but only if my credit card debt goes to 0. She then suggested i wait the next 4.5 years when my PSLF kicks in.

I then called someone from the Atlantic Bay Mortgage Group and said that they would use RE-PAYE- I did talk about my salary and my loan debt but did not get into specifics. It is hard to know who is correct. I do not want to get my hopes up.

Your saying most lenders will use REPAYE gives me more confidence that the gentleman from Atlantic Bay Mortgage Group is more accurate. I have just never heard of them and Quicken Loans are widely known.

Any recommendations you have would be greatly appreciated.

Thank you,
Gina

Most lenders should now be willing to accept REPAYE payments when calculating DTI ratios. You can always call and ask ahead of time to make sure.

Glad to hear it. Thanks Vicki!!