Deferred installment debts such as student loans must be included as part of the borrower’s recurring monthly debt obligations. If the borrower’s current report does not indicate the monthly amount that will be payable at the end of the deferment period, the lender must obtain copies of the borrower’s payment letters or forbearance agreements so that a monthly payment can be determined and used in the borrower’s total monthly obligations.
An inside secret when dealing with student loan companies is that if a loan is in forbearance and you make monthly payments, the student loan companies may report the amount you were paying as a monthly payment on your current report. This is helpful in establishing low monthly debt obligations and increasing your purchasing power.
If the student loan debt monthly obligations is not showing on your current report, in lieu of obtaining copies of the payment letters or forbearance agreements, the lender can calculate a monthly payment using no less than 2% of the outstanding balance as the borrower’s reoccurring monthly debt obligation. However, if any documentation is provided by the borrower or obtained by the lender that indicates the actual monthly payments, that figure must be used in qualifying the borrower.