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Help Calculating DTI

Munchkinerin
Established Member

Help Calculating DTI

My boyfriend and I are applying to purchase a truck. We are hoping he will be approved to take out the loan in just his name. His credit score is not a problem as his lowest FICO Score is 750. Alliance has stated that him being on the loan himself shouldn’t be an issue as long as his DTI is below 45%. I have a few questions regarding how to calculate DTI when you share some expenses with your non-married significant other.


Boyfriends debt: 

-Rent: $971/month total or $486/month his half.

-RV: $460/month total or $230/his half. We are co-borrowers on this loan (though credit reports state co-signer?). We just opened this account in October and our first payment has not showed up on our reports yet. Balance is $37,832.

-Credit Card: minimum payment $25/month. Current balance $160, Credit Limit $3500.

-Student loan: $0/monthly minimum payment. Balance $3,364

-Student Loan: $0/monthly minimum payment. Balance $5,855

-SyncB/Car Care Disc: $0 balance, Credit Limit $1000

 

These are my Questions:

-His last two paystubs came out to $3400 before tax. When calculating income- it seems like they count how much you make before taxes? Is that correct?

-We currently rent from my parents and pay them $971/month. It’s essentially all under the table so no records but I told Alliance that he pays $486 since we essentially split the cost, is that correct? Will the bank count rent as $486 or $971?

-We just bought a fifth wheel (RV) in October, which is why we need this truck.  The plan is to live in the RV full time while I travel for work, which will require us to move locations every 3 months. We will be able to live off of just my income once we start doing this, but my boyfriend will look for odd temp jobs for the experience. We will start traveling within the next 2-3 months and at that point we will no longer be paying rent on a house. Would Alliance CU take this into consideration and not count our rent towards our DTI? Or should we keep our mouth shut since our plan would involve my boyfriend leaving his current job, which I’m sure is a red flag to banks?

-We are co-borrowers on the RV purchased in October, although when looking at our credit reports on MyFICO it states “co-signer” on all 3 reports. This is different than co-signing since co-borrowers are equally responsible for payments. Our minimum payment is $460/month, but since my boyfriend is a co-borrower would they be able to count it as only $230/month (half)?

-What other bills are factored in? Electric? Internet? Monthly subscriptions?

-Would the payments on the truck that we are applying for be included in the calculating? We would be getting a rate of 2.89% for 60 months if they can match our other offer, 3.19% if not. Truck is $27,000, borrowing $23,000 plus fees. I can’t remember what the other bank said our monthly would be so I will guesstimate $450/month to play it safe.

 

1 REPLY 1
Kforce
Valued Contributor

Re: Help Calculating DTI


@Munchkinerin wrote:

My boyfriend and I are applying to purchase a truck. We are hoping he will be approved to take out the loan in just his name. His credit score is not a problem as his lowest FICO Score is 750. Alliance has stated that him being on the loan himself shouldn’t be an issue as long as his DTI is below 45%. I have a few questions regarding how to calculate DTI when you share some expenses with your non-married significant other.


Boyfriends debt: 

-Rent: $971/month total or $486/month his half.

-RV: $460/month total or $230/his half. We are co-borrowers on this loan (though credit reports state co-signer?). We just opened this account in October and our first payment has not showed up on our reports yet. Balance is $37,832.

-Credit Card: minimum payment $25/month. Current balance $160, Credit Limit $3500.

-Student loan: $0/monthly minimum payment. Balance $3,364

-Student Loan: $0/monthly minimum payment. Balance $5,855

-SyncB/Car Care Disc: $0 balance, Credit Limit $1000

 

These are my Questions:

-His last two paystubs came out to $3400 before tax. When calculating income- it seems like they count how much you make before taxes? Is that correct?

Yes, usually pre tax income, some want last years tax numbers, however many except the last few months average income.  They don't want a one month high with commissions etc.  They also want to see employment for 6 months or more (this can vary also)

-We currently rent from my parents and pay them $971/month. It’s essentially all under the table so no records but I told Alliance that he pays $486 since we essentially split the cost, is that correct? Will the bank count rent as $486 or $971?

Again most use the number that you give them, however they have a lot of info as to average rent in an area .

-We just bought a fifth wheel (RV) in October, which is why we need this truck.  The plan is to live in the RV full time while I travel for work, which will require us to move locations every 3 months. We will be able to live off of just my income once we start doing this, but my boyfriend will look for odd temp jobs for the experience. We will start traveling within the next 2-3 months and at that point we will no longer be paying rent on a house. Would Alliance CU take this into consideration and not count our rent towards our DTI? Or should we keep our mouth shut since our plan would involve my boyfriend leaving his current job, which I’m sure is a red flag to banks?  They are lending money on the belief that he is employed and making the money he has been

-We are co-borrowers on the RV purchased in October, although when looking at our credit reports on MyFICO it states “co-signer” on all 3 reports. This is different than co-signing since co-borrowers are equally responsible for payments. Our minimum payment is $460/month, but since my boyfriend is a co-borrower would they be able to count it as only $230/month (half)?

They should take the $230/month if you have paperwork showing co-borrower,

-What other bills are factored in? Electric? Internet? Monthly subscriptions?

Credit Cards, Loans, Child Support, Spousal Support, any month bill that is necessary every month.  Things like phone, Internet, etc are extras and usually not included.

-Would the payments on the truck that we are applying for be included in the calculating? We would be getting a rate of 2.89% for 60 months if they can match our other offer, 3.19% if not. Truck is $27,000, borrowing $23,000 plus fees. I can’t remember what the other bank said our monthly would be so I will guesstimate $450/month to play it safe.

That is a question for Alliance, is the 45% pre or post new loan


Good luck

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