Finance
A Kansas borrower with significant student loan debt is applying for a mortgage. How does the lender treat student loan debt in the DTI calculation?
AStudent loan debt is excluded from DTI calculations
BStudent loan payments (actual or required minimum) are included in the monthly debt calculation for DTI purposes✓ Correct
CStudent loans only count if currently in repayment
DStudent loans are counted at 1% of the balance monthly regardless of actual payments
Explanation
Lenders include student loan debt in the debt-to-income calculation. The specific treatment depends on the loan type (FHA, conventional, VA) and whether loans are in deferment.
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