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I heard that my car payment wont count on dti if less than 12 mths to pay off, true?

  • March 30 2014 - US
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Answers (8)

Profile picture for GMerino

If it is a leased vehicle they will still count the debt because someone who leases a vehicle will trade the vehicle that is leased for another leased car.  I have seen cases where conventional is 12 months and FHA 10 months or less.

  • March 31 2014
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This can be true depending on the type of loan you choose and the lender you work with. Sometimes if the car payment is still a large amount towards your monthly debt, it can still count towards you DTI. So it all really depends on the situation and if you have proper documentation as well. The best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • March 31 2014
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I agree with Wayne...the automated approval needs to show that payment as omitted.  Have you considered just paying that off now if you are having an issue qualifying?
  • March 31 2014
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Depends on the lender that you are working with and the type of loan you are trying to qualify for. Typically, with good documentation this is true.
  • March 31 2014
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Profile picture for JustinLeffew
It will really be up to your lender. If you are going by straight conventional/FHA guidelines you are on the right track but keep in mind that lenders will have additional overlays so you'll want to talk to a Loan Officer directly about your situation.
  • March 31 2014
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FHA says that installment debt of 10 months or less will count if amount may impact borrowers ability to repay the mortgage during the initial stages of the mortgage. Generally that is interpeted to mean $100 or more monthly.  On conventional loans it has been typical not to count installement debt of less than 10 months, but the determining factor is now what the automated underwriting states.
  • March 30 2014
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For FHA loans, if less than 10 months on installment debt it is not included in debt to income. There is some underwriter discretion there but it's a fair rule of thumb.
  • March 30 2014
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Not if it is a lease and typically it is under 10 months that will allow the underwriter to not count
  • March 30 2014
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