Contract says "no new debt", but...

[thankfulheart]

So my contract for building a home has a clause about not doing anything to mess up my credit or take on new debt.

I am in a highly unusual situation where I am looking at taking a personal loan to pay off a joint mortgage ($7,000). The payment amount will be lower than the current mortgage payment so will help my DTI.

If I am no longer obligated on a mortgage, can I also then have the taxes and insurance for that house removed from DTI as well even though I am still on the deed until a promissory note pays off?

And, is taking the loan for that purpose a major no-no?  I am $27 above the max DTI cutoff the UW will sign off on and there is simply nothing else to trim unless I refi my car.  I'd rather get out from the mortgage as it's the only joint account I have left.

[Sunshine85]

My gut says an UW will still count the taxes and insurance, because you're still on the deed.

Also, I really think an UW might frown upon taking out the personal loan to pay off the joint mortgage. They're nitpicky that way. I think refinancing the car would be much safer, and not cause an UW to raise their eyebrows.

You can always pay off the joint mortgage once you close on your home- and you could look into being taken off the deed. Good luck!