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Can I EVER get a mortage with UNpaid private student loan default?

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My PRIVATE loan from 15+ years ago defaulted over 2 years ago, result of unemployment and huge minimum payments I couldnt keep up with increases of.


$50,000 UNpaid PRIVATE student loan. Defaulted 2 years ago. Have not paid since; dont plan to. Settlment offers are half, which I obviously dont have- and at my low income level, never will. I have NO interest in setting up payment plans that would last for decades.


Now I got a new job this summer, $40,000 a year.


Previous annual income: <$20,000... finally have a $40,000 income here which is liveable.


Have roommates, no car, no mobile phone, no iphone, no entertainment expenses other than netflix, dont go out to lunch, etc. Live as meagerly as possible.


Current Bedroom Rent and Utilities (already have roommates, pricey city, already at one of the cheapest places): $1300 a month





Mortgage on a $40,000-50,000 dumpy studio condo I found in the suburbs:

<$500 mortage and utilizes (super tiny studio, 300 square feet,

utilities run <$150 on average for them total, add ~100 for commuting further)


Savings: $3000


Credit card debt: $2000


Other loans and defaults: $0


Like I said, I dont plan to ever enter into voluntary payment plans for that UNpaid PRIVATE student loan.

I simply could never pay off $50,000 plus interest as it keeps increasing with interest. I can never, realistically, settle NOT even if they offer me more than half off. Rent is pricey.


Private UNpaid student loan of $50,000 defaulted TWO YEARS AGO.

Realistically, Ill never be able to pay that off, and dont intend to try, as the numbers simply are impossible. I dont make enough income to settle or put a dent into $50,000 of a defaulted private student loan + APR.


Can I ever quality for a mortage? A tiny condo with mortage in the surburbs would cut my living expenses by MORE THAN HALF. Like I said, I already have roommates & live in the cheapest safe room I could find. Suburban rooms for rent are maybe $100 cheaper, but then you add commuting costs. Tiny dumpy condo is safe enough, and very small at under 300 square feet mortage would cut my living expenses in half.




610-650... if I pay off credit cards, I should at least hit 620-640 across the board by when I could realistically afford a condo (probably this winter).

Edited by Yaystartingover

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No. No lender is going to take the risk, especially only 2 years ago. Since it's private, it'll come off your report in a few more years. They will probably take you to court, though.


Sent from my LG-M150 using Tapatalk

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Turns out I can and DID just buy a cheap condo.


I close in a few weeks.


Went to mortgage lender a few hours after posting this to get a pros opinion. Shockingly, was approved in-house for a mortgage. Immediately went to a realtor and put an offer one a condo I had been window shopping for online. Seller accepted within another few hours, they had lowered price yet again trying to get rid of it. Im shocked and pleasantly amazed. Still have to finish some things and sign on the line.


I will find a person to take over my current lease.


My rent/mortgage will soon decrease by HALF.


All 302 square feet are mine!


With that huge savings each month, I will start creating some savings and perhaps even consider eventually setting with private student loan once their offers to settle get better than half off so its in a range I have a chance at affording. Once settlement offers get to about 25%, or 12,500, I could actually have a chance at saving up for that with cost of living cutting in half. Hopefully. Mortgage company referred me to to a credit pro that specializes in settling private huge student loans for less.


The two+ year mark was good enough for my small mortgage lender.


My credit score they pulled was 655.


Wrangled up a bit more savings from an old work retirement account that helped too.


Also qualified for several new home buyer programs, that included downpayment assistance.


Raise helped too. Had previous good work history for a year or more at least too. Had no other negative marks on my credit, other than obviously huge unpaid private student loan.


Anyone who has found themselves strangled by private student loans like me:

Your entire life isnt damned.

You might be able to buy a house one day too, at least a very cheap one, as I just have.

You might not truly have to pay your entire loans off (many private student loans send you letters for 25-50% off settlment after default.).

There is hope, despite what the majority of people think- that were doomed forever. Were not. Gotta start packing for new home!!!

Edited by Yaystartingover

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Glad it helps spread hope. :)


It will put me in such a better financial position saving half on my living expenses alone.


My student loan defaulted over 2, but under 3 years ago. My mortage lender said any chargeoffs or collections in under 2 years would have meant no.


I have a number of credit cards and store cards reporting positively, with a few of those having 2-3+ years worth of history.


Score pulled at 655 also worked magic. :)

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Keep us updated on how UW goes and their requirements.

Exactly. Especially once the student loan lender gets a whiff of applying for this mortgage they will come out of the woodwork to hold up closing.

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I would love to know how they're dealing with the student loan. I'm in a similar situation, but I defaulted 5 years ago, and my scores are still too low.


Sent from my LG-M150 using Tapatalk

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Already closed on the condo and moved in. 


Enjoying it and saving money doing it. :)


Private student loan still unpaid, defaulted over 2 years ago. Didn’t affect my (very cheap) condo.


Hope. Finally.

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Just to clarify your statements.  You stated that this was approved as an "in house" mortgage?  So this is not a FHA/Fannie/Freddie backed mortgage?

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