Daycare Expenses in DTI?

[Anonymous]

I was just reading an article stating daycare costs are considered against DTI. Is this the case for all mortgage lenders? It's not a huge deal, but also unexpected as we hadn't considered that.

[Anonymous]

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@Anonymous wrote:
I was just reading an article stating daycare costs are considered against DTI. Is this the case for all mortgage lenders? It's not a huge deal, but also unexpected as we hadn't considered that.

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I believe this is loan specific. A VA loan for example would require child care expenses to be factored into DTI where other types of loans do not.

[ShanetheMortgageMan]

Daycare expenses are factored into VA's residual income requirement, but aren't factored into the actual DTI.  No programs I am aware of will factor daycare expenses into the DTI.

[Anonymous]

It is a VA loan we are looking at using. From what I can tell, I think they do actually count it against our DTI. I've had trouble finding a clear answer online though. I just want to know what to prepare for.

[VALoanMaster]

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@Anonymous wrote:

It is a VA loan we are looking at using. From what I can tell, I think they do actually count it against our DTI. I've had trouble finding a clear answer online though. I just want to know what to prepare for.

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Hi KDavison15,

No, child care is only counted in your residual income calculations.

If your lender tells you otherwise, find a new one.

[Anonymous]

Thanks VALoanMaster! The article I read was from Veterans United. It's possible I misunderstood, or maybe that's just something specific to them. Appreciate the info. Although I just went back and read it again, so I don't think I'm misunderstanding:

https://www.veteransunited.com/futurehomeowners/how-the-cost-of-children-could-help-or-harm-your-va-...

[ShanetheMortgageMan]

Yup, it could just be an overlay they have, where they add it to the DTI ratio.