DTI Question

[Anonymous]

Hi,

I have less than 5 payments left on my auto loan.  Im planning to apply for a home loan in december/january and wondering if my 525.00 auto loan payment will be calculated into my DTI ration.

[sports1965]

I think any debt that will be paid off in a certain amount of time(i think 8 months) doesn't count towards DTI

[DallasLoanGuy]

yes, because it is considered 'significant'

significant = $100+

however, if you have the assets.... you 'could' back out the balance from checking and move forward.

example:  owe $2000 on car(balance)

have $10K in checking

underwriters sometimes will let the processor back $2000 out of the 10k (submit loan with 8k assets) and let you exclude from dti

[Anonymous]

Thanks.  I dont have the money in savings/checking and likely wont by that time.  I am planning to pull money from my 401k.  Im assuming that my 401k would be considered as an asset in this scenario?  Am I wrong?

[DallasLoanGuy]

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@Anonymous wrote:

Thanks.  I dont have the money in savings/checking and likely wont by that time.  I am planning to pull money from my 401k.  Im assuming that my 401k would be considered as an asset in this scenario?  Am I wrong?

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i would push for it if the file was otherwise strong.... and i always win my pushes.

hard to say without looking at the whole file.

what is dti with/without that payment?       ??% / ??%

[Anonymous]

5000 gross per month

525 Car Note

250 IRS Installment

500 Student Loans (currently in deferrment; ends in Jan/Feb 2015)

If my calculations are correct the DTI is 25% with car note/15%

I have 4 credit cards which I pay down to zero every month.  Not sure how to calculate CCs into DTI...???

[DallasLoanGuy]

5000 * .45  =  2250  that would be max total debt with house

2250 - 525 - 250 - 500 = 975 left over for housing payment

[Anonymous]

Thanks!  Why did you multiply by .45?  Where does the .45 come from?  Not quite understanding... sorry if my questions seems silly...

[edcampbell613]

45 was the DTI he was using I am guessing.

[edcampbell613]

Also, is the car note a lease?

If you are a month or 2 away from it being paid off at time of closing, some underwriters will not count the car payment pending strenght of the file.