Question about DTI

[m3rge]

Hi everyone!

My wife and I (primary borrower) own a mortgage. When I calculated my DTI shows I'm sitting at 66% this is only with my monthly income. I know this number is not good for me, but as I said is calculated with my income. Now, my wife and I have a checking account were the salaries of both of us are received.

My question is: the way I'm doing the DTI is correct? (using only my monthly income and not combined since she is a secondary borrower)

I plan on getting on car at the end ofcthis year or the beggining of the next one and this kindda worries me..

Thank you all!!!

[llecs]

DTI (as seen by most lenders) is calculated by adding up all of your minimum payments listed on your CR on non-$0 balances listed on your credit reports and dividing that into your monthly gross income, then express as a percentage. So it would include your mortgage payment, any loan payments, listed minimum payments on your CCs, and min. payment listed on bad accts, etc. My mortgage lender calculated it that way but excluded any charge cards like my Amex.

[boomhower]

If you are the sole barrower then yes, the way you are doing it is correct.  If you are joint applicants then you can use both incomes. 

[m3rge]

Thank you llecs and boomhower, doubts clear!

[Anonymous]

Some lones/banks are strange, the one I applied for (not an auto loan) had some minumal requirements included but not limited to:

Borrowers will need a debt-to-income ratio (excluding mortgage) below 35%

In a way it may make sense, my mortgage+insurance cost less than a $600 1-bedroom apartment... one of the benefits of Indiana.

This may be irrelevant to you, because I'm not sure how stricte lenders can be with car loans.

Just making conversation

[m3rge]

Thank you Volpes!

My plan is to go with my credit union which I currently have a loan of 1741/3000. I have a Walmart Store Card with  5000 CL and the mortgage which I pay 626 monthly. Like I said the mortgage borrowers are me as primary and my wife as secondary. Even including both in the DTI I would be sitting around 45%-50% and that would not be favorable for me in the purchase. I plan on giving 5k down for the car and I would really like something below 4% APR. I'm free of baddies but I still think the DTI will throw me down