Anonymous
Anonymous asked in Business & FinanceCredit · 2 weeks ago

DTI ratio for mortgage?

I’m calculating what loan I will qualify for. If I’m paid ahead by over a year on student loans (next payment is required over a year from now) is it included in the monthly DTI ratio when applying for mortgage loan?  I have another loan which I also paid in advance over a year. I won’t be able to pay off the total before applying for the mortgage but I’m hoping the overpayment will work in my favor. 

For example:

Income: $ 58,000 annual

Car loan: $400

Student loan: $70 (paid off for the year+)

Care credit loan: $240 (paid off for the year+)

Credit card minimum: between $35- $0

Don’t get me wrong, I plan to continually pay off these debts each month even though the minimum payments are $0.00.

Thanks!! 

Update:

In my statement accounts, the student loan and care credit show a minimum payment “$0.00” until 2021 

2 Answers

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  • 2 weeks ago

    STOP PAYING AHEAD on your loan, you have not done anything to save money.

    Had you told the loan company to put the extra amount to principle, you would have reduced your overall interest.  In fact, you have actually increased your interest because you aren't making a payment for over a year.

    -- call the loan companies to see if they can re-allocate these payments to principle.  They likely won't, but it's worth a try.

    Your debt to income includes these loans because it's what you would be required to pay per the agreement.  You also need to include all your bills, car insurance, health insurance, cell phone, etc.

    At the very most, you can purchase a property for $184,000.  Are there properties for sale in your area for that amount? 

  • Anonymous
    2 weeks ago

    For your purposes, paying early does not help beyond the slight lowering of the total debt amount.

    And, I am not even sure you are allowed to skip a payment no matter how many extra you make. (I know when I had a car loan 30 years ago. I could not)

    What matters is your total monthly debt including the new home loan cannot be above a certain amount.

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