How Lenders Can Help Borrowers with $100K+ in Student Loans Qualify for a Mortgage

Student loan debt is no longer a niche problem. Today, many borrowers—especially those with graduate degrees—carry six-figure balances. For lenders, this often presents a roadblock: high assumed monthly student loan payments can inflate debt-to-income (DTI) ratios and lead to unnecessary denials.

But here’s the good news: it doesn’t have to be that way.

Borrowers don't have to be disqualified because of student debt—and lenders don’t have to lose those deals. With the right documentation and tools, you can help your clients qualify for more home—even with $100,000+ in loans.

Why the 1% Rule Is Failing Borrowers

In many cases, lenders default to using 1% of the borrower’s student loan balance as their monthly payment—especially if the loans are in forbearance or if documentation is missing. That means:

• $100,000 in loans = $1,000 monthly payment on paper
  
• $140,000 in loans = $1,400 monthly payment
  
  

Even if the borrower’s real payment is closer to $200 or $0, these inflated numbers kill affordability.

👉 This impacts not just mortgages, but also auto and personal loan approvals.

How LoanSense Closes the Gap

LoanSense bridges the gap between borrowers, lenders, and student loan servicers. We help borrowers:

• Enroll in an income-driven repayment (IDR) plan
  
• Secure guideline-compliant documents
  
• Lower their calculated monthly student loan payment used for DTI
  
• Stay on track for Public Service Loan Forgiveness (PSLF), if applicable
  
  

We also help lenders by providing real-time student loan payment estimates through our LoanSense Affordability Calculator and compliant documentation to submit to underwriting.

Real Impact: From $1,320 to $174 Payment = $90K More Affordability

Let’s walk through a real example:

• A nurse in Texas had $132,000 in student loans
  
• The lender was using $1,320/mo as the estimated payment
  
• She couldn't qualify for the home she wanted
  
  

✅ LoanSense helped her enroll in SAVE (IDR) using income from two years prior (when she worked part-time)

✅ New payment: $174/month

✅ Increase in mortgage affordability: $90,000

Time to get documentation: 2.5 weeks
Outcome: She closed on her dream home within 6 weeks

How Much More Can Borrowers Afford with LoanSense?

Let’s break it down:

• Borrower income: $75,000
  
• Student debt: $100,000
  
• Lender uses 1% rule = $1,000/mo payment
  

LoanSense-verified IDR payment = ~$223/month


🟢Affordability boost: $84,000 more house
🟢If payment drops to $0 (possible under SAVE or PSLF): $108,000 more affordability

What Lenders Can Do Today

Want to avoid losing qualified borrowers to incorrect DTI calculations? Here’s how to partner with LoanSense:

1. Refer borrowers directly to LoanSense
   
2. Use our API or platform integration to receive updated payment estimates
   
3. Close loans faster with the right documentation the first time
   
   

Bonus: Help Borrowers Find Down Payment Assistance

Many borrowers don’t know about down payment assistance programs available in their area.

Direct them to:
🔗 Down Payment Resource — a free tool to find programs based on location, income, and more.

Final Thought: Student Debt Shouldn’t Stop Borrowers from Building Wealth

Student loans shouldn’t block borrowers from owning homes or building financial stability. With LoanSense, you can give them the opportunity they deserve—while closing more loans.

✅ Help borrowers move from debt to wealth
✅ Unlock approvals you would otherwise lose
✅ Improve financial outcomes for both clients and your institution