Question about DTI - Any Help??

[firemartinez1980]

This may sound stupid, but is your DTI based on your monthly payments of items or the Overall owed balance??

For instance, If you have a $30,000 auto loan and your payments are $600 a month, does it help if you refinanced and your payments were $400?

(Those are just numbers as an example)

THANKS!!!

[Anonymous]

DTI for a mortgage or something like that is monthly payments based, not total balance. So yes refinancing could make a significant difference.

[Physh1]

Overall debt.

[firemartinez1980]

Hahaha, Ok, so 2 different answers

Which is correct??? Anyone.....Anyone

[Anonymous]

Overall debt isn't how mortgage lenders calculate it. I also just was applying for a personal loan and they used monthly payments as well. Perhaps there's some kind of lender out there that looks at overall debt, but I haven't run into one.

[Anonymous]

Your debt-to-income ratio is the sum of all your monthly payments divided by your monthly gross income.

So for the numerator add up all your recurring monthly bills; house payment, auto, credit card minimum payments, alimony, child support, cable, electricity, etc.