Online Mortgage Calculator vs. A Lender

[Anonymous]

So, I have been entering in my actual numbers in the online Mortgage Calculator to see how much I will quailify for...when I punched in my numbers, it always says I can't afford anything, my debt to income is 38%.  I am working with a Lender, and he says everything looks fine.  Why on earth are these How Much You can afford calculators saying I can't afford anything!? So confused ...

[Peter1142]

The calculators are very conservative... they say 38% but a lender will typically go up to 41-43%. 38% Debt to income is considered very good really.

[Anonymous]

ok, good to know.  I just paid off a couple of credit cards, and got it down to 36% ... So, this is considered good?

[frugalQ]

Does the 36% include the estimated future mortgage payment? If so, yes 36% is pretty good.

[madmann26]

How are you figuring your DTI?

Things like lights, water, cell phone, internet, tvsat do not count toward DTI.

Things like rent, credit card monthly payments (what you're supposed to pay, not what you end up paying), car payments DO count toward your DTI.

[StartingOver10]

---

@madmann26 wrote:
How are you figuring your DTI?

Things like lights, water, cell phone, internet, tvsat do not count toward DTI.

Things like rent, credit card monthly payments (what you're supposed to pay, not what you end up paying), car payments DO count toward your DTI.

---

Not rent. The loan officer will use the total new housing payment (on the new purchase) to figure out his front end ratio and then add the other debt (installment loans and credit card min payments) to figure out the total DTI.

The new housing payment consists of:  principal, interest, real estate taxes, homeowners insurance, mortgage insurance (when applicable), HOA or condo fees (if applicable). It does not include utilites or cell phone bills, or other similar items.

[Anonymous]

So in other words they don't care if they cut your lights off, or  gotta eat parched peanuts for supper. 

[madmann26]

---

@StartingOver10 wrote:

---

@madmann26 wrote:
How are you figuring your DTI?

Things like lights, water, cell phone, internet, tvsat do not count toward DTI.

Things like rent (OR mortgage), credit card monthly payments (what you're supposed to pay, not what you end up paying), car payments DO count toward your DTI.

---

Not rent. The loan officer will use the total new housing payment (on the new purchase) to figure out his front end ratio and then add the other debt (installment loans and credit card min payments) to figure out the total DTI.

The new housing payment consists of:  principal, interest, real estate taxes, homeowners insurance, mortgage insurance (when applicable), HOA or condo fees (if applicable). It does not include utilites or cell phone bills, or other similar items.

FIXED!

(that's what I meant, just didn't clarify)

[Peter1142]

Rent should not count towards DTI in any circumstance. Only your new primary housing payment is considered, along with any other mortgage payments on any other properties you may own. Even if you are renting a second apartment, this should not count towards DTI.

[DallasLoanGuy]

one's ability to pay ancillary items like electric/water/ect are considered when applying the 43%ish rules.