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Member
Posts: 13
Registered: ‎02-08-2014
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Zero Balance Amounts and DTI

Just a quick question. If my credit cards are showing a zero balance on my credit report, does the minimum payment still have to be counted for my DTI since I could still use that card in the future or does it count as zero?
New Contributor
Posts: 200
Registered: ‎01-24-2014
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Re: Zero Balance Amounts and DTI

[ Edited ]

Nope!

 

as long as they are at 0 there should be no calculation of payment affecting your DTI (debt to income)

 

 

Contributor
Posts: 180
Registered: ‎08-18-2012
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Re: Zero Balance Amounts and DTI

I was reading on a banker's site recently where the LO would "estimate" monthly payments (counting 5%) of total limit for each card account if the report was showing zero balances.  Can they do that?

Moderator Emeritus
Posts: 10,860
Registered: ‎12-30-2011
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Re: Zero Balance Amounts and DTI

[ Edited ]

RnJ wrote:

I was reading on a banker's site recently where the LO would "estimate" monthly payments (counting 5%) of total limit for each card account if the report was showing zero balances.  Can they do that?


From information I've read here they don't do that.  If they did, I'd go find a different lender.

 

There's really not much point anyway, they get your bank statements and your tax returns: it's not a long walk to figure out your income vs. your spending pattern and see if you can realistically afford the mortgage payment or not.  Credit cards that you're not carrying a balance on almost by definition fall into the other 57% of one's financial life.

 

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Contributor
Posts: 180
Registered: ‎08-18-2012
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Re: Zero Balance Amounts and DTI

Thanks, Revelate, good to know.  I didn't think it made much sense, and couldn't figure out why they would do such a thing, unless perhaps on a jumbo-loan or borderline loan - even then, you're right, the bank statements produced should be enough to determine.

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Posts: 13,893
Registered: ‎12-13-2013
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Re: Zero Balance Amounts and DTI

In years gone by it was standard for LOs to include DTI using max out on your cards CL, this practice is long gone, my local CU doesnt even use how much credit I already have available in DTI calcs in deciding whether to give me a personal loan or CLI on my plat visa with them they only take into consideration what I actually owe..

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Member
Posts: 13
Registered: ‎02-08-2014
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Re: Zero Balance Amounts and DTI

Thanks, all! I'd been reading conflicting information, so I was a bit nervous. It didn't seem right that they would count them just because you COULD use them.
Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
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Re: Zero Balance Amounts and DTI

I think I remember they used my minimum payment on my CCs in my DTI. But since they were so low it didnt add up to much.

New Contributor
Posts: 200
Registered: ‎01-24-2014
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Re: Zero Balance Amounts and DTI

You need to find another lender, are you dealing with a big bank? They love to put in overlays

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