Not necessarily.

Just because your student loans are in deferment doesn’t mean they can be ignored for mortgage qualification. Most loan programs require lenders to include a monthly payment for deferred student loans when calculating your debt-to-income (DTI) ratio.

How that payment is determined depends on the loan program. Some loans allow the lender to use the documented payment shown on your credit report or student loan statement. Others require the lender to calculate a qualifying payment based on the outstanding loan balance if no qualifying payment can be documented.

Because the guidelines differ between Conventional, FHA, VA, and USDA loans, the answer isn’t always the same. That’s why it’s important to review your student loan documentation before assuming your deferred loans won’t affect your mortgage approval.

The good news is that deferred student loans rarely prevent someone from buying a home. We simply need to apply the correct guideline for your loan program and determine how the payment impacts your debt-to-income ratio.