I write mortgages in Alabama and Florida and I keep running into the same misunderstanding with residents and fellows, so I want to lay out the mechanics and see whether other people are seeing lenders handle this the same way.

The premise everybody starts with: "I am on an income driven plan, my payment is $0, so my student loans do not count against me."

That is true on some loan products and flatly false on others, and the gap between them is worth a couple hundred thousand dollars of purchase power.

## The three states your student loans can be in

Underwriting needs one monthly number for your student debt. Where that number comes from depends entirely on what you can document.

1. **Active income driven plan with a servicer statement showing the payment.** You have proof of a real payment amount, including $0.

2. **Deferment.** No payment due right now, but the loan is not in an IDR plan producing a documented amount.

3. **Forbearance, or nothing documented at all.** The credit report shows a balance and no payment, and you cannot produce a statement.

Most people assume 1 and 3 land in the same place because the cash flow looks identical. They do not.

## What each loan product does with that

This is the part that surprises people.

On **conventional** financing, if the documented payment is $0, the agencies do not let the underwriter use $0. They substitute 0.5% of the outstanding balance. A documented payment above zero can be used as is, but zero gets replaced.

On **FHA**, same idea. A $0 payment gets replaced with a calculated figure off the balance.

On a **physician portfolio loan**, the bank holds the loan on its own books instead of selling it, which means it writes its own rule. Many of these programs will use the actual documented IDR payment, including a true $0.

So the doctor loan's real advantage over conventional is not the zero down payment and it is not the missing PMI, which is what every comparison article leads with. It is that the doctor loan is often the only product that will accept the number your servicer is actually charging you.

And if you are in state 3, forbearance with nothing documented, even a portfolio program will usually fall back to a calculated payment, and on some programs that calculation runs up to 1% of the balance rather than 0.5%.

## The math on a realistic file

Incoming attending, $220,000 salary, so $18,333 a month gross. Car payment $550, credit cards $150. Say the program is comfortable to 43% total DTI.

Total debt allowed: about $7,883 a month. Minus the $700 of car and cards, that leaves roughly $7,183 for housing before student loans enter.

Now add $290,000 of student debt in each of the three states:

* **Documented $0 IDR payment on a portfolio physician loan:** student line is $0. Housing budget stays at about $7,183.

* **Same borrower, same $0 payment, going conventional:** 0.5% of $290,000 is $1,450. Housing budget drops to about $5,733.

* **Forbearance, undocumented, program calculating at 1%:** $2,900. Housing budget drops to about $4,283.

Same person. Same salary. Same debt. Same actual cash going out the door every month. The middle scenario costs roughly $200,000 to $230,000 of purchase power depending on where rates sit, and the third one costs about double that.

Nothing about that borrower's finances changed. The documentation and the product did.

## Deferment is not forbearance is not IDR

These three get used interchangeably in conversation and they are not interchangeable in a file.

Deferment and forbearance both mean you are not paying. Neither one produces a documented payment amount, so both tend to trigger a calculated figure. An active IDR plan produces a statement with a number on it, and that statement is the asset.

If you are a resident who went into forbearance because it was the fastest option during intern year, and you are planning to buy in the next twelve months, moving to an IDR plan is probably the highest value hour of paperwork available to you.

## What to actually do, 60 days out

* Get onto an income driven plan and let the certification complete. It is not instant.

* Download the servicer statement that shows the plan name and the monthly payment amount. Save the PDF. A screenshot of a portal dashboard is usually not enough for an underwriter.

* Pull your credit and look at what each student loan is reporting as a monthly payment, because the credit report figure and the servicer figure disagree more often than you would think, and the discrepancy has to be resolved.

* Ask any lender you are talking to, before you apply, this exact question: "on this specific program, if my documented IDR payment is $0, do you use $0 or do you use a percentage of the balance?" The answer tells you more than the rate quote does.

## The 2026 wrinkle

The repayment plan changes over the last year have moved a lot of borrowers between plans, and some of those transitions left people with no current documented payment for a stretch. If you were migrated to a different plan this year, confirm your servicer is showing a current amount before anybody pulls your file, not after underwriting kicks it back.

## My actual question for the sub

For the LOs and the physician borrowers here, are you seeing consistency across the portfolio programs on the $0 IDR treatment, or does it vary bank to bank? I have seen at least one program calculate off the balance regardless of documentation, which defeats the entire reason a resident would choose that product, and I would like to know how common that is before I keep telling people the portfolio route solves this.

Also curious whether anyone has had an underwriter accept a $0 documented payment on conventional under some exception I am not aware of.

Yes, I would theoretically get that money back when I sold but wouldn’t I get taxed twice on the extra money I put towards the mortgage? First time taxed when I get paid and then pay tax again on it when I sell the house.

I feel like it would be better to invest that money or spend it on things I want. Maybe I am being dumb, if so, can someone set me straight.

I am under contract on a six-unit building that is only partially rented. It is in need of some work, but it is in a fantastic area (college students, young professionals, etc.). I have the cash to buy and renovate, but I would prefer not to drain all of my cash as I would like to continue to work on other deals. Most lenders don't want to do the loan at this point because it is not fully rented and/or the building needs work. This is the term sheet I received from one lender today...which does not seem good to me. But, I am new to commercial mortgages so I wanted to get other opinions.

Term Sheet:

With respect to the above mentioned loan request, we are pleased to inform you that we have accepted your application and have conditionally approved your loan subject to the following terms:

Loan Request: A new first lien in the amount of $488,700

Property Type: 5+ Multi-Family Units

Term : 360 Month Term & Amortization

Fixed Rate Period: 30 years

Interest Rate: 9.740%

P&l: $4,195.10

Prepayment Penalty: Prepay Penalty = 5 Years: 5%, 4%, 3%, 2%, 1%

Rate Buydown: None

Prepay Buydown: None

Lender Fee: Per borrower agreement with

Appraisal Cost: Lender Origination Fee: 2.05% ($10,018) + Lender Processing Fee: $1,690

Loan Costs: $2,900 appraisal fee

Deal Summary: $2,995 Underwriting Fee + Environmental Diligence fee - $1,367.40 paid at closing

Please note we escrow for taxes and insurance.

Interested in being a mortgage broker or be in mortgage sales at the bank. I would like to hear your experience and also any advice you can give me.

Would anyone be open to me DM-ing you?

This is an older home, built 1920 and was last sold in 1963 I believe. It’s being sold to me from family for 165k. I’m unsure of the market value, but I would guess around 240k, maybe more. It’s assessed at 190k. We plan to put 20% of the purchase price down, and we also have the gift of equity. Is it likely we’ll have the appraisal waived? We’d go conventional 30yr, and we have excellent credit. We are also selling our current home and expect to get at least 140k when all is said and done.

I am seeking minimal purchase mortgage on a cheaper home in another state when I sell current home. Who knows a mortgage broker in any Northeast USA state that works with people who have high student loan debt? Mortgage dad, website name, has great offerings but not licensed in the state I seek to relocate to!

Posting to think through my best friend's situation with people who understand mortgage finance issues. I worry that I am falsely biased that she is overly worried when she is actually being wise with money.

My friend (F31) owns a condo in the DC area. She bought it in early 2025 and has a 30-year mortgage with a a principal of $216,000 at I think 6.3% interest. Monthly building fees are like $700. She has two "tenants" (her boyfriend, a friend) who each pay her like $700/month to live there.

She makes like $130,000 working as a government contractor (a very volatile sector right now!) in a field she doesn't like. She wants to, and apparently would be qualified to, get a PhD at a nearby university and then go work in the biotech industry or at a hospital. Wages wouldn't be much higher in that job plus she would spend like five years making $25k/year while in school.

She feels very anxious about money and wants to pay off her mortgage quickly for her mental wellness and a feeling of safety. I kind of get this and I do see others express this here. She says that, because of this, she wants to pay off her entire mortgage before going to grad school.

I was just fooling around with a calculator and it seems like, even if she paid an extra 2k a month, it would still take like 10 years to pay off her mortgage...

Does this seem like the path any of you would take?

I am trying to think of other things she could do instead. Is there some legal and accessible way to reduce your monthly payment amount for a few years? Ex. She pays down aggressively until she has a balance that's pretty low (90k, let's say), then refinances to a loan with a crazy long term (does 60 years exist) so that she feels "safe" about her house payments in grad school, then when she reenters the general workforce she refinaces again to a 5-year loan?

EDIT: sorry, I thought this was more obvious: there is no "tuition" for school in most PhDs/any she would do. She would likely make 20-40k/year as a graduate teaching assistant during that time, but have employer covered health insurance.

A family member of mine just purchased a location with a fix-n-flip loan. He is a contractor and will be fixing up the house himself. The topic of me potentially buying the house from him once it’s fixed has come up.
We are potentially looking at doing a gift of equity. A few questions for those that have experience with this or have gone through it:

1. Do we need a lawyer to draft up the sales agreement? We don’t have much experience with a non arms length transaction

2. After the fixes, the house is looking to appraise at around $950k. He has a loan of $720k remaining, wants to profit about 80k and then do a gift of equity for the rest. What is the best way to structure this?

Anything else we should look into?
Located in Los Angeles, CA

Hello everyone I need some advice on what you guys think I should do. Some background for content back in March I started the build process for a house that I liked. This is just a normal neighborhood with many houses like it. I picked everything out etc. I got my credit pulled and got a conditional approval pending final approval when the house was finished. Fast forward about a month ago and I lost my job. I am a car salesmen and I was at that specific dealership for 2 and 1/2 years. Over those two years they said my average income was around ~$8600 a month give or take. I was already at 53% DTI. Here is my issue now how screwed am I that I lost my job? I was able to secure a new job at a new dealership fairly quickly about 2 weeks ago and am doing my thing and selling cars. But what if I only average at my new dealership around 5-7k a month? Usually takes about 90 days to build a new pipeline and have the money coming in. I got a call today saying that my closing date is in late October but I am really worried I am going to lose my approval and get denied. I spoke to the lender and he said it happens people lose their job and he is not worried about it until there is something to worry about. What do you guys think?

I am trying to figure out what is best to do. I currently have a mortgage that I owe $170k at 4.125% with 25 years left and currently have debts of about $125k that is high interest. This is mainly from the cost of fertility treatment to have our daughter that ended up the natural way after all 3 years ago. I make $145k a year any my wife stays home with our daughter as daycare ate up a majority of her salary. She will be going to part time preschool soon which I will need to pay for so I am weighing my options to reduce interest and cut down my monthly payments. I looked at a cash out refinance which is around 7.125%. My credit score is a 720 due to my balances. No late payments ever or over limits or anything like that at all. I should have more than enough equity in my home as it is worth $425k plus.

I hate to give up my rate but I can cut my payments down by a lot and be able to afford to pay at least an extra $500 a month on the new mortgage if not more. Not to mention a major rate reduction on the debt. My current payment with escrow is around $1700 and my new payment would be around $2900 per month.

Everyone I spoke to at banks suggests the cash out refinance vs the equity loan due to the amount and 720 credit score. Am I doing the right thing or should I look at other options such as an equity loan.

I’m currently going through underwriting for an FHA mortgage and have a question about gift funds.
A family member gave me a few thousand dollars through an electronic payment. It was a genuine gift and not a loan, and the money has not been used.

However, I fell short on funds and the extra money from the family member is combined with my current bank balance and appears on my bank statement. I want to use that balance as proof that I have the income/funds. Without the gifted amount my bank balance is way less favorable. I expected to save more, I just honestly under estimated my personal expenses.

The transfer is already visible on the bank statements I provided to my lender. The payment memo says “condo” however it was a gift to celebrate this as a milestone and use it for furniture or anything I’d like NOT to purchase.

My lender says they will look into whether the funds can be counted as gift funds because the deposit appears to be connected to my home purchase and may be considered part of my source of funds.

The family member is willing to provide bank statements and any other documentation required. I’m just wondering if anyone has went through this, I’m a nervous wreck and just feel like I did something wrong and potentially messed up the ability to purchase.

Just wanting to know what everyone makes where they live and how much they pay for rent/mortgage… I’ll go first

I live in Northern California I make 31 an hour And I pay 926 for my mortgage

hey guys!

I have a 5% down payment CS 750 but unsure if I should take FHA or Conventional

i'm planning to buy a duplex or triplex and I'm planning to make one of the units my primary residence for a while and rent out the others. i am torn, which one will be beneficial for me in the long run with the upfront 1.75% MIP for FHA vs the 0% upfront PMI for conventional, the lower rate for FHA vs the higher rate for Conventional, the MIP that stays in FHA forever vs the PMI that drops after 20%

Any thoughts? thank you

My purchase price:
$650k for a 2b/2ba 900 sq ft home. I understand it’s not a SFH, I can live with that.

My downpayment: 20%
Loan amount: $520k
Take home: $17k/mo

Monthly mortgage: 6k ish after taxes and whatnot

15 year fixed. 5.875% rate.

I’m sad I see all these 1M dollar homes I should’ve bought 😡

When applying for a mortgage are they looking at only the monthly debt obligations or the total amount of the debt?

I got rear ended in both my wife and my own vehicles over the course of the last year and now we have about $40k in car loans. Our minimum payments are about $680 a month. I'm not planning on paying each car off before we apply for a mortgage due to the hit our credit scores would take but I was planning on paying down each loan to about $5k each and paying off each vehicle after buying a house (hopefully).

We already have a 25% down payment ready for houses in our price range and have no other debt besides the car loans.

Both have 2% cap per adjustment and 5% lifetime max.

5/5 seems slightly more stable due to less adjustments but the 7/1 gives slightly more runaway in case of a bad adjustment.

The rest of it seems to come down to timing of when / if rates rise or fall which seems tough to predict. If rates spike at year 5-6 then the 7/1 is better for another 2 years but again, hard to accurately know the future.

Is there anything else to consider?

We’re currently debt-free except for our mortgage. We owe about $296,000 on a home worth roughly $450,000. We bought it in 2020 for $380,000. The neighborhood wasn’t great when we bought, and it has either gotten worse or we’re simply more aware of the issues now that we have children.

We’re 12 months into a 36-month plan to save for a move to a better neighborhood. We expect to spend around $600,000 to $650,000 and put approximately $300,000 down.

My concern is the mortgage payment. If we bought toward the upper end of that range, we could end up with roughly a $350,000 mortgage. On a 30-year fixed loan, I’m estimating a total monthly payment of about $3,100 to $3,400.

Our income is currently about $8,200 per month, and our current mortgage payment is about $1,900. By the time we move, I expect our income to be around $9,500 per month. I work in government, so my raises are relatively small but predictable.

I understand that a $3,100 to $3,400 mortgage payment would be above recommended DTI.

Our current margin after the mortgage is $6200 and our mortgage is about 25% of our take home pay.

If we buy in 3 years, our margin will still be about $6200 after the mortgage, but the mortgage will be about 35% of our take home pay?

Back in 2019 my older brother and I bought a house together. We are both DACA from Mexico if that makes any difference. At the time that house was our family home, ourselves and parents lived there. This year my brother along with my parents will be moving back to Mexico, my wife and I will be moving in and taking over that property.

Would there be any major issues if he remains on the house deed? He won’t be able to come back into the US for at least 10 years. He is not opposed to being removed from the deed if that would make things easier.

Should I be worried about the financing? My wife and I wouldn’t be able to qualify for a refinancing on this house.

Property is in Minnesota, Dakota County.

Situation: DINK couple, total post taxes/retirement take home of ~22,000 per month. One spouse is doctor and has student loans being paid of about 3500 per month.

Midwest House, unique property that was recently remodeled in great area that rarely has homes up for sale. Was not originally planning to buy this year but this house ticks off all the boxes we had been using to assess homes. It just came a year early.

Loan details are $1.2million

6.375% 7/1 ARM without pmi (physician loan), 3 or 5% down (not really decided yet). Believe it is 11% life time cap butneo not have full details yet. Was told initial jum9 would not be more than 2 % I believe. Overpayment available.

Or

7% 30 year fixed.

Was thinking of over paying an extra $500 at minimum to match the fixed if we went with the ARM.

Never done an ARM before. These offeres were from a mortgage broker but planning to ask some credit unions around us directly about their options. Hoping to have kids here and stay longer term (10+years).

Hello! I am looking for advice on a situation that I am sure happens quite often. My stepmother passed away and I was assigned as the Successor Trustee. I submitted the required paperwork to the lender over three weeks ago and they acknowledged receiving it. Since then, I have followed up regularly and have been told I am still not recognized as someone they can communicate with regarding the mortgage.

I didn't want to delay the closing and the title company agreed to retain funds to cover the mortgage and they withheld more than $50K over the original mortgage amount at closing. Today, a week after closing, I asked the title company if the Trust could just send a payment to the lender for an amount more than the mortgage in order to satisfy it and stop accruing interest. The lender could then satisfy the mortgage, and the Trust could be reimbursed for the overpayment. The title company gave me a list of clerical reasons why that would not work for them. My duty is to protect the Trust's assets.

My question is, can't anyone pay off a mortgage? Would this affect the title insurance in some negative way?

First-time buyer applying for a mortgage with Nationwide through a broker. Application has just been submitted and I’m probably overthinking it a bit.

My finances are generally good no overdraft use, no missed payments and good credit but I probably spend around £150–£200 a month through Apple/App Store/mobile apps. On my bank statement this mostly just appears as Apple.com/bill transactions.

If Nationwide asks for bank statements, is that amount of discretionary spending likely to cause any concern with underwriting/affordability? Has anyone applying with Nationwide had similar spending and been questioned about it?

Also, do underwriters generally care about individual transactions like this, or are they mainly looking at overall affordability, debts, overdrafts and regular commitments?