| When everyone firsts thinks about applying for a | | | | If you have student loans that are not deferred for |
| mortgage loan the first concern is their credit scores. | | | | three years then a payment will be calculated for you |
| And, where your credit scores are really important and | | | | and that will be included in your debt, even though you |
| must fall within a certain range, your debt holds an | | | | are not currently making payments toward your |
| equally important status when it comes to actually | | | | student loans. |
| getting approval for that home loan. | | | | If you are making court ordered child support |
| Often a borrower will look at their own income and | | | | payments then these will also be included in your debt. |
| their own payments and think oh I can make a house | | | | If you have outstanding collections, a payment amount |
| payment of 'x' amount. However, mortgage lenders | | | | may be included as part of your debt even though you |
| have their own view of your debt and what you can | | | | are not making any payments toward these |
| afford to make as a future house payment. | | | | collections at the time. |
| Even though debt-to-income ratios vary somewhat a | | | | What if some of the debt in your name is being paid |
| typical example would be that only 39% of your | | | | by someone else? For example, your parents may be |
| income can be your future house payment and only | | | | paying your student loans for you, but these loans are |
| 43% of your income can be total debt. For example, if | | | | in your name and showing as debt on your credit |
| your monthly income is $2000, then your new house | | | | report. |
| payment, including taxes, insurance and PMI, can be no | | | | Some lenders will allow this payment to be removed |
| more than $780 and your total debt can be no more | | | | from your debt calculation if your parents can show |
| than $860. Now, this debt does not include the cost of | | | | copies of cancelled checks where they have been |
| such things as your utilities, groceries and gas for the | | | | making these payments, will sign a letter stating that |
| car. | | | | they plan to continue paying this debt and can show |
| Typically it is the monthly payments for all the items | | | | income sufficient to continue making these payments. |
| showing on your credit report. If you have a credit | | | | Not all lenders will allow this but if you are having a DTI |
| card that shows a minimum payment of $30 on your | | | | problem it is certainly worth pointing out to the lender to |
| credit report, but you typically pay $50 each month | | | | see what they will say. It is also worth trying another |
| toward that outstanding balance, only $30 is counted | | | | lender if you are turned down because of your DTI |
| by the mortgage lender in calculating your total monthly | | | | and this is your situation. |
| debt. | | | | Another example may be that ex-spouse is making a |
| Some items on your credit report that might cause a | | | | car payment on an automobile loan that is still in your |
| variance are student loans, child support and/or | | | | name. The same documentation proof would be |
| collections. | | | | required. |