Payments that will drop in 12 months?

hsfun2019 · ‎03-13-2023

Good evening.

I am finishing a divorce and looking to purchase a new home.

Am I correct in the fact that if I only have 12 payments left of a say a car loan/personal loan they are not included in the DTI? I'm trying to maximize the DTI ratio (some of the debt is not paid by me but shows up on CR from ex wife).

Thank you!

donkort · ‎03-13-2023

Based on my research, the car payment would be included in the DTI.

FICO 8: EQ 810; TU 816; EX 822 as of 7/5/2022

Mortgage-Specialist · ‎03-13-2023

If you are doing a Conventional loan and you have 10 payments or less on an installment loan such as a vehicle, that payment is omitted from your debt ratio. It cannon be a lease as they assume you will lease again and you're really not able to prove that you're not.

If it's an FHA loan, a payment of 10 months or less left can be omitted as long as it is less than 5% of your monthly income. If you gross 5k per month, that car payment must be $250 or less in order to remove it from DTI