When I applied for a mortgage loan, the loan officer was (or said she was) optimistic that my student loans wouldn’t present a problem, because I’m on income based repayment, which means I just pay about $100/mo on them even though were I were paying the full amount it would be $1500/mo.
Then she took my information to the underwriter. When she called back a few days later, she was audibly upset. She had to offer me with a much lower loan amount than she’d estimated. The underwriter insisted on doing the math as though I were paying $1500/mo. And the loan officer said she had in her possession an email from a head underwriter for the regional federal office guaranteeing the loan which stated that underwriters must do this.
I tried a different lender–same story. Initial optimism. Later, the loan officer had to tell me, in a genuinely upset tone of voice, “I struck out.”
Everyone involved at both lenders says (without me even having to prompt them) that it’s a crazy, nonsense rule. But they all take it to be ironclad, handed down from the very top.
So I go ahead with the loan on the terms that were offered, deciding to just swallow the giant down payment that will result. It’s not really an amount of money I am happy to spend, but there are various very good reasons for us to go ahead and do it.
At the same time, I start contacting government officials.
It’ll never work, I know. But I’ve gone in and read the actual underwriting manual that all of this is supposed to be based on. I know I can read complicated policy documents, and this one isn’t even that complicated. And it does not say what everyone is saying it says. In fact it basically says the opposite. It says my loan payments should be considered to be $100/mo, not $1500/mo.
So I look up phone numbers and write emails to people in the relevant government office. And one guy does end up talking to me. He’s actually really friendly and helpful, and takes my query to someone he calls “the underwriter.”
It turns out (I had no idea this was going to happen) that “the underwriter” is the very self-same person who had written the email referred to above, the one that states that people must use the full loan payment amount, not the amount as adjusted under Income Based Repayment. Well shit, I think.
That was a few weeks ago.
Two days ago, I got a call from my loan officer. “Are you sitting down?”
I don’t know exactly what happened. I don’t know if “the underwriter” in charge of underwriting for this region changed her mind, or if the email she wrote had been misunderstood, or what. But she told my lender that in her opinion, I should be counted as paying $100/mo, not $1500/mo. Now, she actually doesn’t get to require my lender to do so–she sets minimum standards, but if lenders want to have certain higher standards, they’re free to do so. But my lender decided to go with it.
I don’t know if this was an exception made just in my particular case, or if I have managed to effect basically a policy change (or change of interpretation of policy) for the entire region, (and no one really seems to want to speak to that issue, for reasons I can probably understand,) but either way, I have managed to save myself over $10,000*, via contact with serious people in charge of serious, big things–through persistence, friendly insistence and careful reading. It’s like my dream come true, not just the saved money, but how I managed to get the whole thing going. It’s exactly how I imagine myself accomplishing anything important, and for once it’s worked.
My lender was just raving about how incredible and unexpected it was. My wife was literally dancing in the living room during the call. It was just a great, great moment.
We move in about a week and a half.
*Over the short term… of course money paid over the life of the loan is a different story but for us right now keeping the extra $10,000 is best by far.