Debt to Income ratio too high (help with calculating)

[Estexan07]

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@Anonymous wrote:

Won't consolidating my debt into a new loan hurt my credit score?    Also I'm not sure I would save very much on the monthly payments, maybe $50 or something trivial.

As a small business owner, I'm not sure which is better:

1.  Pay myself a higher salary/W2 income at the expense of less business profit

2.  Pay mysel a lower salary/W2 income with the benefit of showing higher business profit on the tax return

Which option do mortgage lenders prefer for small business owners?

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Huh? Reconsolidating to an extended term (20, 30 years...) will most definitely lower your payment... a lot. 

With 220k in student loans at a payment of ~$2400 a month you must be on a 10 year term. On a 20 year term your monthly payment would be roughly $1500. A 30 year term would be $1300 a month.

Even then,your DTI would still be around 50%. You'd need to also drop the car payment to reach ~46%. This might fly with some lenders. To break the magic 45% you'd need to also drop the credit card payment or find a cheaper house.

To your original question. It's just all monthly payments added up (including projected loan) divided by gross monthly pay. 

[Anonymous]

My student loans are mix of public and private, is there a way to consolidate that into one loan?

I was under the impression that student loans can only be consolidated if they are all public.

[ktl72455]

For self Employed, they look at and compare 2 yrs worth , not one.. so take your bottom line for 2 yrs( income minus ALL expenses etc), divide by 24mo to get your monthly wage to figure your debt to income. 2nd.. take less deductions , amend returns if you have to so all your current debt fits into your deb to income ratios. If you have deprectation deduction, it can be rolled back in and counted as income. If you have rentals, it goes deeper, more complex.

I am self employed as well.  One other way around it is going with a portfolio loan/mortgage which is one way I am considering. 

[AZEsq]

Definitely don't consolidate, but you can move to IBR (as long as payment isn't $0) OR change the type of repayment fairly easily. Deferment or forbearance will not help with DTI, they'll still count 1% of balance or amount to fully amortize the loan in monthly debt. I definitely would call about stretching out repayment, at that dollar value, you're likely on the standard repayment already which is 30 years. There's really nothing "further out" you would be able to do. IBR is your best bet and doesn't require a credit pull. Unless you've got private loan debt, the rates should be unde 6% anyway so a refinance is likely not going to work. I'd do IBR with most SL companies, you can apply online within the portal and they'll respond within 24-48 hours with your new payment and terms, which should satisfy underwriting.