topic Re: Debt for mortgage approval in Mortgage Loans

Debt for mortgage approval

Anonymous — Sun, 23 Aug 2009 23:28:19 GMT

I am getting ready to apply for a mortgage loan.I have 2 auto loans and was told I should get one of those paid off.One of the loan balances is $6700.I heard someone say that mortgage companies usually don't count installment loans that will be paid off in 10 months or less. Don't know if this applies to all lenders or some. I was trying to see if I should pay the full balance or pay it down to a balance that will be paid off in less than 10 months

Thanks

Re: Debt for mortgage approval

Anonymous — Sun, 23 Aug 2009 23:56:16 GMT

that is a big misunderstanding.

Accounts that are under 100 per month and will be paid off rathere quickly MAY, at the underwriters discrestion, be backed out of DTI.

Also, in some cases, the UW may discount an item on towards DTI if there is more than enough money in cash reserves to pay item off. In these cases, they run the numbers at you having less cash reserves but the item is paid off (even though it is not). The point being that they assume you could pay it off if you got in a pinch.

In either case, you can not count on this as it is the UW discretion how they count it.

Re: Debt for mortgage approval

DallasLoanGuy — Mon, 24 Aug 2009 01:15:34 GMT

couldn't have said it any better