topic Re: Is childcare factored into DTI? in Mortgage Loans

Is childcare factored into DTI?

Anonymous — Wed, 31 Mar 2021 00:20:19 GMT

Building my first house and my DTI is really low when calculated 9 percent before mortgage and 22 percent after mortgage. I am wondering if childcare is factored in? I don't want to be surprised at closing. I pay about 2000 in childcare a month.

Re: Is childcare factored into DTI?

dragontears — Wed, 31 Mar 2021 00:27:40 GMT

Not that I am aware of.

Re: Is childcare factored into DTI?

Slabenstein — Wed, 31 Mar 2021 01:53:09 GMT

No, and if it were they couldn't apply it evenly as a UW standard since ppl could just not tell them about it. For DTI they should just be looking at monthly housing costs, monthly debt payments, and any other outstanding money owed, like collections or child support.

ETA: I'd never heard of daycare, etc, being part of DTI, but according to the internet I'm wrong. Hopefully someone more knowledgeable can give you a definitive answer.

Re: Is childcare factored into DTI?

jhb — Wed, 31 Mar 2021 01:44:53 GMT

I'm not an expert, but this is my experience...during my VA loan process, childcare cost was a question all lenders had when calculating monthly debt. So I will assume it is taken into consideration based on my experience with three different lenders. This could be VA specific, but the mortgage experts will chime in shortly...

Re: Is childcare factored into DTI?

dragontears — Wed, 31 Mar 2021 01:52:08 GMT

@jhb wrote:
I'm not an expert, but this is my experience...during my VA loan process, childcare cost was a question all lenders had when calculating monthly debt. So I will assume it is taken into consideration based on my experience with three different lenders. This could be VA specific, but the mortgage experts will chime in shortly...

I know VA loans are different on what is used when DTI is calculated so they could include it.

I am not an expert in VA loans but I frequently see phrases like "residual income" and other odd DTI terms only used in VA loans.

Re: Is childcare factored into DTI?

GrandBaker — Wed, 31 Mar 2021 03:52:56 GMT

Simple rule (sorta) is that if it cannot be reported to a credit bureau then it will not be counted in your DTI. So in this case it is a no.

Re: Is childcare factored into DTI?

Anonymous — Wed, 31 Mar 2021 12:29:33 GMT

@jhb wrote:
I'm not an expert, but this is my experience...during my VA loan process, childcare cost was a question all lenders had when calculating monthly debt. So I will assume it is taken into consideration based on my experience with three different lenders. This could be VA specific, but the mortgage experts will chime in shortly...

We have had the same experience with our VA loan, on two occasions I've had to submit letters stating that we do not have monthly childcare expenses...

Re: Is childcare factored into DTI?

VALoanMaster — Wed, 31 Mar 2021 16:37:33 GMT

@Anonymous wrote:
Building my first house and my DTI is really low when calculated 9 percent before mortgage and 22 percent after mortgage. I am wondering if childcare is factored in? I don't want to be surprised at closing. I pay about 2000 in childcare a month.

Hi @Anonymous,

Childcare is only counted on VA loans. Conventional, FHA & USDA do not.