Deferment Questions

[StickMe]

I am in the middle of house-hunting and getting a mortgage finalized and have been given a list of things the lender needs. That includes proving that my loans will be in deferment for at least the next 12 months.

Now I'm working on getting everything together to apply for deferment and I have some questions.

First, as I understand it, they are only supposed to take my income into account for economic hardship and not my wife's. How do I prove I have not had any income over the last year? If I show our tax return, they will see our income as $70,000 (which is all from my wife). If I include a copy of her W-2's, would that be sufficient? Is there another way?

Also, since I am starting the application process as an M4, should I apply saying I do not work full-time? Or should I apply as if I were already an intern and base it on my up-coming year's salary?

Thanks for the help.

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[StickMe]

Another question:

I consolidated back in my m2 year because rates were so good. Now I have that loan plus a perkins from my school, and loans from 3rd and 4th years. Should I consolidate and then defer or worry bout deferring now to get the mortgage squared away and then deal with consolidation later?

 

[jane70]

I'm also trying to figure out the whole deferment and mortgage business.....from what I have gathered if you defer any now, it would be with no income and then when that changes in July you have to notify them. I heard Perkins shouldn't be consolidated with Staffords b/c there low interest rate is lost and it will then become an unsubsidized loan. Are you getting a conventional loan or one of the doctor's loan?

 

[StickMe]

Well, my school's financial aid office is apparently clueless. Each person I talk to keeps referring me to someone else. I'm getting a doctor's loan through BOA.

 

[CorpusERdoc]

I am in the middle of house-hunting and getting a mortgage finalized and have been given a list of things the lender needs. That includes proving that my loans will be in deferment for at least the next 12 months.

Now I'm working on getting everything together to apply for deferment and I have some questions.

First, as I understand it, they are only supposed to take my income into account for economic hardship and not my wife's. How do I prove I have not had any income over the last year? If I show our tax return, they will see our income as $70,000 (which is all from my wife). If I include a copy of her W-2's, would that be sufficient? Is there another way?

Also, since I am starting the application process as an M4, should I apply saying I do not work full-time? Or should I apply as if I were already an intern and base it on my up-coming year's salary?

Thanks for the help.

You do not need to provide the tax return. Just write on your application "no income--full time student." Do not include a copy of her W-2's or your tax return.

You do not apply as an intern, as it is based on the previous year.

 

[CorpusERdoc]

Another question:

I consolidated back in my m2 year because rates were so good. Now I have that loan plus a perkins from my school, and loans from 3rd and 4th years. Should I consolidate and then defer or worry bout deferring now to get the mortgage squared away and then deal with consolidation later?

Consolidating would be a TERRIBLE idea.

There is absolutely no reason to ever consolidate in the current market. The loan rates are fixed, which is the only benefit. If you consolidate---not only will you increase the interest rate on the lower rate loans, but you will begin accruing interest on your Perkins loan. While you defer in residency, you are not responsible for interest on your Perkins loan---as long as you don't consolidate it.

 

[CorpusERdoc]

I'm also trying to figure out the whole deferment and mortgage business.....from what I have gathered if you defer any now, it would be with no income and then when that changes in July you have to notify them. I heard Perkins shouldn't be consolidated with Staffords b/c there low interest rate is lost and it will then become an unsubsidized loan. Are you getting a conventional loan or one of the doctor's loan?

No. You apply for deferment or forbearance on an annual basis. It is based on the PREVIOUS year's income. You do not need to contact them again until you reapply 1 year later.

 

[shocker]

I am in a very similar boat as the OP. I am looking to do BofA Dr. loan and need to close in mid-May. Should I get everything ready and apply for deferment now or wait until the day after graduation? If I waited then it would be very close to the proposed closing date of the house purchase.

Also, I have federal and private loans.

Federal: I am scheduled to receive 6 months grace period, do I have to lose that and apply for deferment early to get everything ready for the mortgage?

Private: Can I consolidate and have them defer it now versus having to wait until internship begins. If I can't get them to put it into deferment right away I will take the hit on my total available to borrow and would lose the deal.

Thanks for any help!

 

[shocker]

One other quick question.

Do the student loans need to be eligible for deferment or actually in deferment.

Thanks

 

[CorpusERdoc]

One other quick question.

Do the student loans need to be eligible for deferment or actually in deferment.

Thanks

actually in deferment.

BOA required that I sent them documentation showing I was in deferment.

 

[CorpusERdoc]

I am in a very similar boat as the OP. I am looking to do BofA Dr. loan and need to close in mid-May. Should I get everything ready and apply for deferment now or wait until the day after graduation? If I waited then it would be very close to the proposed closing date of the house purchase.

Also, I have federal and private loans.

Federal: I am scheduled to receive 6 months grace period, do I have to lose that and apply for deferment early to get everything ready for the mortgage?

Private: Can I consolidate and have them defer it now versus having to wait until internship begins. If I can't get them to put it into deferment right away I will take the hit on my total available to borrow and would lose the deal.

Thanks for any help!

I would apply for deferment now. It won't go into action until you graduate in May anyway...

 

[jean veljean]

Is there a length of time of deferment that the bank is asking for ..like 1 month 1 year etc.

I am currently in "in school deferment status" so if I could close tomorrow do i still need to apply for a deferment since I am already theoretically in "in school deferment"

 

[shocker]

BofA is asking for proof of 12 months of deferment.

 

[CorpusERdoc]

Is there a length of time of deferment that the bank is asking for ..like 1 month 1 year etc.

I am currently in "in school deferment status" so if I could close tomorrow do i still need to apply for a deferment since I am already theoretically in "in school deferment"

You'll need to apply for economic hardship deferment that begins upon graduation and show proof of this. You can do that now.

 

[RedBlue04]

so with deferment... i can apply now, i'm a graduating MS4? i graduate in may. from above, it seems like i can go ahead and apply for deferment? how does this affect the 6mo grace period that we get? or does it just add on to that?

thanks!

 

[CorpusERdoc]

so with deferment... i can apply now, i'm a graduating MS4? i graduate in may. from above, it seems like i can go ahead and apply for deferment? how does this affect the 6mo grace period that we get? or does it just add on to that?

thanks!

Yes, apply now. You lose the grace period. You won't need it as an attending.

 

[Johnisit1234]

i am confused. i thought we got a 6 month grace period after graduation before going into repayment. why should i not wait until that 6 months is over before applying for deferment? will it hurt to apply for deferment now before i have even gone into repayment? Thanks for everyone's help!

 

[CorpusERdoc]

i am confused. i thought we got a 6 month grace period after graduation before going into repayment. why should i not wait until that 6 months is over before applying for deferment? will it hurt to apply for deferment now before i have even gone into repayment? Thanks for everyone's help!

No. It won't go into action until you graduate.

 

[shocker]

How long is the deferral request turnaround time? 1 week, 1 month?

 

[CorpusERdoc]

How long is the deferral request turnaround time? 1 week, 1 month?

It took me a week...

 

[DOctorJay]

Consolidating would be a TERRIBLE idea.

There is absolutely no reason to ever consolidate in the current market. The loan rates are fixed, which is the only benefit. If you consolidate---not only will you increase the interest rate on the lower rate loans, but you will begin accruing interest on your Perkins loan. While you defer in residency, you are not responsible for interest on your Perkins loan---as long as you don't consolidate it.

I'm under the assumption that the interest rate will be cut to about 3.3% July 1 which is lower than my previously consolidated loan rate. If this is the case would it then be a good idea to consolidate my M3 and M4 loans?

 

[bjackrian]

I'm under the assumption that the interest rate will be cut to about 3.3% July 1 which is lower than my previously consolidated loan rate. If this is the case would it then be a good idea to consolidate my M3 and M4 loans?

If you're talking about Stafford loans, Congress's student aid bill last year set rates through 2012. After 2012, rates are currently set to increase to 6.8%. All these rates are fixed for the life of the loan, and my understanding from my finaid office is that even if you consolidate in 2011-2012, your interest rate remains what it was when the loan was disbursed. Very frustrating.

* 2008-2009: 6.00%
* 2009-2010: 5.60%
* 2010-2011: 4.50%
* 2011-2012: 3.40%