Pay off car or no home loan!!!

[WhirledPeasPlease]

I had to do this exact same thing in order to get my DTI to a decent level.  It hurt, that's for sure.  I took the money I was going to use to put 10 percent down, and applied it to the car instead.  Making that payment was much scarier than the thought of taking on a mortgage on a second property.

[DallasLoanGuy]

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Cobweb wrote:
I wonder if the underwriter would approve you if you paid off the car down to 10 remaining payments? I think 10 months and under remaining on the loan and it isn't factored into you DTI.

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if those 10 payments are over $100 you will see them included in dti

[Cobweb]

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@ShanetheMortgageMan wrote:

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@Cobweb wrote:
I wonder if the underwriter would approve you if you paid off the car down to 10 remaining payments? I think 10 months and under remaining on the loan and it isn't factored into you DTI. Doing this, you would have $5500 and change in savings left in the bank. Additionally, you could start quickly building up your savings once those 10 car payments were out of the way. I'm sorry to hear about your string of bad luck. It sounds like your family has bounced back, and you are being very pragmatic about your future. Good luck with whatever you decide.

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For FHA the payment has to be $100 or less and have 10 payments or less to be excluded from the debt to income ratio. Higher payments can be excluded on a case by case basis but something like $500/mo isn't going to be able to be excluded in my opinion.

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Thanks for the clarification, Shane!

[Anonymous]

Ok, So we got word that we dont have to pay it off until one week before we close. We will transfer it over to our parents and then buy it back after we close escrow or just make payments to them. 

On another note, we got final approval today with all loan docs sent over to the builder to start the process of building our house. It took 52 days for the whole process and today was our deadline!! 

We will celebrate when we have the keys in our hand, but it is still exciting. It has been a long rough road, so hopefully no more speed bumps from here on out!

Thank you to this wonderfull forum for all the help in rebuilding our credit in order to make this happen.

Goos luck to those of you just starting this journey.

[ShanetheMortgageMan]

Congrats on the final approval!

[Junejer]

Congrats Reese.