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How to calculate DTI ratio with a Joint Mortgage?

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Anonymous
Not applicable

How to calculate DTI ratio with a Joint Mortgage?

I have a joint mortgage w/ my brother and we are in the middle of refinancing. I am hoping to refinance my car as soon as this refi is fully funded and am wondering how exactly DTI is calculated w/ a joint mortgage? Our current payment is $2729 and our new payment will be $2138. Minimums post-refi will be as follows:

 

Income: $56,000 (includes built in overtime and profit sharing/bonuses)

 

Mortgage: min $2,138 after refi (split 50/50 w/ my brother)

Costco Citi card: $10,270/$17,000 min $251

Chase Freedom: $4,350/$4,900 min $43

Auto: $21,399/$32000 min $470

 

I tried to refi my car back in March with this same CU when my scores were much lower, debt was much higher and when I still thought that Credit Karma was the only way to check your credit scores (LOL!). I have paid down a significant chunk of debt since then, wiped out my nasty 25% interest rate Discover card from over $8,000 down to $0 (!!!) and am hoping that between that and the lower mortgage payment I will actually qualify this time. I've already called my credit union and found out that they use Experian Fico 8 Auto score (mine is 747) and was told that I qualify for their A-tier rates of 4.4% up to 72 months with a .5% reduction for autopay. Not sure if it would be worthwhile to shop this or just pull the trigger? With the information above (I can provide any other necessary info if needed) is it realistic to think that I could get a better rate with someone else? The only reason that I want to stretch back out to 72 months is to lower my monthly burden to give myself more firepower to wipe these **bleep** credit cards out. As soon as those are gone I plan to throw everything that I can at the car and pay it off as quickly as possible. The goal is to be debt free except for my mortgage!

6 REPLIES 6
tcbofade
Super Contributor

Re: How to calculate DTI ratio with a Joint Mortgage?

Using simple math, your new DTI will be 62%. 

 

4.4% is a fine rate... better rates exist, but it certainly isn't bad at all. 

02/01/24 Fico 8: EX 757, EQ 803, TU 783.
Fico 9: EX 760 12/16/23, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 2 of 7
Anonymous
Not applicable

Re: How to calculate DTI ratio with a Joint Mortgage?

What is the typical maximum DTI for an auto loan? Or is this very lender specific?
Message 3 of 7
tcbofade
Super Contributor

Re: How to calculate DTI ratio with a Joint Mortgage?


@Anonymous wrote:
What is the typical maximum DTI for an auto loan? Or is this very lender specific?

VERY lender specific.

 

If you've got a relationship with this CU and a preapproval, you should be fine.

 

Good luck!

02/01/24 Fico 8: EX 757, EQ 803, TU 783.
Fico 9: EX 760 12/16/23, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 4 of 7
Anonymous
Not applicable

Re: How to calculate DTI ratio with a Joint Mortgage?

So when calculating one's DTI when they have a joint mortgage, you would include the whole mortgage payment, not just their share?
Message 5 of 7
tcbofade
Super Contributor

Re: How to calculate DTI ratio with a Joint Mortgage?


@Anonymous wrote:
So when calculating one's DTI when they have a joint mortgage, you would include the whole mortgage payment, not just their share?

Correct.

 

Just one of the unfairnesses of credit reporting methodology...

02/01/24 Fico 8: EX 757, EQ 803, TU 783.
Fico 9: EX 760 12/16/23, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 6 of 7
Anonymous
Not applicable

Re: How to calculate DTI ratio with a Joint Mortgage?

Gotcha. Thanks for the info!!
Message 7 of 7
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