The Student Loan Question
Student debt can materially affect a mortgage analysis, but lenders and programs may calculate it differently. The useful question is not whether a product is "physician friendly"; it is which documented payment and income figures the lender used.
Understanding DTI (Debt-to-Income)
Lenders calculate your DTI by dividing your monthly debt payments by your monthly income:
Front-End DTI: Housing costs ÷ qualifying income Back-End DTI: Housing costs and other counted debts ÷ qualifying income
The thresholds and inputs vary by lender and program. Ask for the calculation used in your written scenario.
How Student Loans Factor In
Different loan programs may use the documented payment, an income-driven repayment amount, a calculated percentage, or another method allowed by their underwriting rules. Confirm the method and supporting documents with each lender.
Income-Based Repayment Impact
If you use an income-driven repayment plan, provide current documentation and ask the lender to show exactly how it was treated. A low documented payment does not by itself guarantee approval or a particular purchase amount.
Documents and Questions to Prepare
- Document your current repayment amount: Keep the latest statement and income-driven repayment documentation if applicable.
- Bring your employment documents: Ask which contracts, start dates, and income records the lender will accept.
- List every debt accurately: Ask the lender which payments it used in the calculation.
- Compare more than one licensed lender: Request current written scenarios using the same assumptions.
Compare the Written Math
For each scenario, record the qualifying income, student-loan payment, rate, APR, points, fees, cash to close, reserves, mortgage insurance, and total monthly cost. Ask what could change before closing.
Compare the Rest of the Loan
Read how to compare physician mortgage options for the other terms to review.