Fannie Mae, a pseudo-government agency, has as of 5/31/2016 changed they way they treat student loans for one's debt to income ratio or DTI. They now require underwriters to take 1% of the ENTIRE balance of the student loan as your monthly obligation, among other unhelpful options, despite the fact that the ACTUAL payment may only be 10% of that amount under B3-6-05: Monthly Debt Obligations.
This is clearly an attempt to keep out new buyers with high student loan debt in order to keep them renting and/or further prevent individuals from getting more space for a growing family. This new rule in no way helps prevent a purchaser from over buying as student loan payments are either fixed or tied to your income.
Why is this important?
This is about those taking out student loans again being disadvantaged for taking out loans to further one's education. If one's monthly payment plan under an Income base repayment plan is $350, one's payment shouldn't be $2000 for the calculation of one's DTI for purchasing a home.
