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Another DTI question

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MichiganMommy
Frequent Contributor

Another DTI question

Is it true if you have less than 1 year of payments on a loan (let's say auto) it does not have to be included into your DTI?
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CreditBob
Established Contributor

Re: Another DTI question

No, that is not true because the amount can still be considered a high balance. Also as long as there is a balance there is always a debt to income. The only way that I could see this as a maybe, no possible affect, the balance would be a $ 100.00 or less. But it is up to each individual creditor.  I have a balance on an installment loan with a $ 19.00 balance and my bank is still going to count it. As long as you owe any creditor, regardless of how big or small the amount is, then there is dent to income ratio.
Message 2 of 4
Anonymous
Not applicable

Re: Another DTI question

I had a car loan with American General back in 2004 when I purchased my last house. I was told at that point when I was shopping for a mortgage (in MA) that if I owed 10 or less payments on a car loan it didn't have to be counted. of course, I'm sure it's different in different states and for different products.
 
Karen
Message 3 of 4
ShanetheMortgageMan
Super Contributor

Re: Another DTI question

Depends on the program you are qualifying for.  For FHA loans, on accounts that have payments of $100 or less, with 10 months or less remaining, they can be excluded from the debt ratio.  For conventional I've had accounts higher than $100/mo in payments and 10 or less payments left and they were excluded as well.
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