calculating DTI correctly

[BeingMaryJane]

When I compare the numbers for my DTI to the LO numbers... They're always different. I'm calculating it based on accounts with balances and the minimum reflected on the report. However I noticed in my trimerge from USAA that Experian has a monthly payment even on zero balance accounts.

whats the correct way to do it for revolving accounts? Do I still have to factor in those with zero balances because they are open and revolving? I would think if it's zero on the report and no balance owed.. That nothing needs to be included.

[Anonymous]

What kind of mortgage are you applying for and what are your scores/DTI? I think if you have a marginal score or borderline DTI, they factor in minimum payments for all revolving credit lines because theoretically you could run up those lines as soon as you close to see if you still fall within DTI guidelines. (I know theoretically you could do a lot of things to your credit and/or debt obligations after you close, but I guess since you already have those lines open...) I had two credit lines that were reporting with $75 balances when I applied and I paid them down to zero before I went to underwriting and they came back with the condition that I needed to close the lines to exclude them from my DTI, which I had to do to qualify since I have such a big private student loan payment. Obviously the pros should weigh in here!!

[Anonymous]

Typically, for revolving accounts, it is whatever the payment is reporting as on the credit report.

[frugalQ]

the only difference I know of with credit card payments is when you have an AMEX charge card...they use a certain percentage of the balance as the monthly payment amount instead of the full about that's due.

[Anonymous]

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@frugalQ wrote:

the only difference I know of with credit card payments is when you have an AMEX charge card...they use a certain percentage of the balance as the monthly payment amount instead of the full about that's due.

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If a charge card is not reported at zero, we will usually need documentation showing that it has been paid off or that the borrower has the assets available to pay in full.

[frugalQ]

oh wow, really?  i thought you just took a percentage of the balance as a minimum payment.

[merc64]

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@frugalQ wrote:

oh wow, really?  i thought you just took a percentage of the balance as a minimum payment.

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That's how the bank figured my AmEx card....they took a percentage (I think 4% of balance) for use in calculating my DTI.