Posts: 91
Registered: ‎02-02-2010

Rules for counting almost-paid-off car loan in FHA or USDA mortgages?

I have a car loan that has about 6 payments left on it. Would this be included in my DTI ratio for either FHA or USDA mortgages? I have found differing info on FHA loans and am unsure about USDA (Rural Development guaranteed, not direct)

Super Contributor
Posts: 8,362
Registered: ‎09-28-2007

Re: Rules for counting almost-paid-off car loan in FHA or USDA mortgages?

Basic rule of thumb is if the payment is $100/mo or more it'll be included in the debt ratio no matter how many months are remaining - if it's less than $100/mo and has 10 or less months remaining then most lenders will exclude it from your debt ratio.  But someone who isn't looking to qualify for a high payment, say a $600/mo payment, and that would already put their debt ratio at a higher level, then you may see an underwriter not feel comfortable excluding that payment since it'd represent a significant portion of your monthly payment each month.

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