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recurring debt
#1
If a client got a recurring debt less than 10 months, is it true that the debt is not counted in DTI ratio?
 
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#2
Any installment loan that has 10 months or less in monthly payments left can be exempt from debt to income calculations. However, it is up to underwriter's discretion and just because you have 10 months or less does not guarantee that it will be exempt from debt to income calculations. Most mortgage lenders will exempt it. Car leases do not count. If you have a car lease that is less than 10 months, that will be counted towards the debt to income ratio calculations. Here is an article I wrote recently and published it on my website:

http://gustancho.com/exempt-debts-from-d...ome-ratio/

 
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#3
On another note, if the mortgage applicant has credit under their name but they are not responsible for paying that debt and can prove to the mortgage underwriter by providing 12 months canceled checks that someone else is responsible for that monthly payment, that monthly payment is excluded from the mortgage borrower debt to income calculations. Here is a related article on co-signing.

http://gustancho.com/co-signing-and-debt...ome-ratio/

 
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