@ThePatronizer wrote:
Since the "Minimum Monthly CC Payment" is included in figuring DTI for a mortgage, would there be any way to pay on my current CCs in a way that would show $0 as the Minimum Amount Due when they pull my report? Perhaps paying right before the statement generates? I'm literally $30 short on my DTI that would allow me to borrow the amount I need, yet I have a CC that reports $35 Minimum Balance Due each month. And I'm not looking to "pay the card off" as a solution. Any ideas on whether this is possible? Obviously my income isn't going anywhere in the next couple months. Thanks all!!
Ok, I am assuming your back end ratio is the issue based on your post above, right?
There are several components that make up the back end ratio: 1) all the items in your front ratio (Principal, interest, RE taxes, hazard insurance and mortgage insurance) plus 2) installment and revolving debt.
Your choice is to either: 1) reduce the balances on your credit card debt to reduce the minimum payment due (the easiest thing to do) OR
2) reduce your installment debt (not as easy) OR
3) reduce an expense in your monthly housing payment.
Since items 1 and 2 are obvious, I will discuss item 3 a bit.
You can reduce your front end ratio (which also reduces the back end) by getting an actual insurance quote for the house you are buying. Many loan officers over estimate the cost of hazard insurance and you can easily find your $30 there (I'm in Fl where the insurance is quite expensive). OR, you can put down slightly more down payment. For example on a FHA loan if you put down 5% rather than 3.5%, you get an additional reward: the MI is reduced from 1.25% to 1.20% - that is a huge savings over a very long time. Or, you can find a less expensive house - or a house that has real estate taxes that are lower. OR find a home without an HOA.
Without knowing more detail, its hard to answer your question directly. These are the items that I check with my buyers when we run into tight ratios.
