Personal Finance & Money Stack Exchange
Personal Finance & Money Stack Exchange

Questions tagged [debt-to-income-ratio]

21 questions
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What's the best way to maintain your credit score after paying off all of your debt?

For several years we have had a mortgage, two car loans, and an active line of credit from our bank. We made payments on all of these religiously and our credit score is now in the high 700s. Recently, we sold our house and used the equity to pay…
Kalamane
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If I co-sign a loan, does it affect my own ability to borrow due to the debt-to-income ratio?

If I co-sign a loan (e.g. for a friend or family member), does it affect my own ability to borrow money due to the debt-to-income ratio?
user454
5
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2 answers

Does Debt to Income Ratio include the loan I am applying for?

I did not find an exact answer, so I wanted to double check. From what I understand, the Debt to Income ratio is based on my current monthly debts divided by my monthly income. I was talking with a lender in Oklahoma, USA, about a HUD 184 Native…
dakre18
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4
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3 answers

Does a 401(k) loan count as debt when calculating Debt-to-Income Ratio?

Does a regular 401(k) loan count as debt when calculating one's Debt-to-income ratio when applying for a mortgage? The loan is within the organization that manages the 401(k), and it does not show in any of the FICO score data.
KingsInnerSoul
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What is included in 43% debt to income ratio calculation for mortgages?

I'd like to know what items a bank will look at for their debt to income ratio calculation for an application. My only loan right now is a car lease. So I'm specifically wondering if any of these items (or others I'm missing) are used to calculate…
user1219278
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Does a 401(k) contribution harm your Debt-to-Income ratio for a mortgage application?

If I contribute to a 401(k) at work, and thus have a lower W-2 income box 1 (Wages, tips, other compensation), will this hurt my debt-to-income (DTI) ratio on a mortgage application? I wouldn't think so, but want to make sure before I start…
WilliamKF
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Should I sell back a lease early in order to improve Debt-to-Income?

My wife and I just started the process of buying our first home. I've noticed DTI is very important as far as how much home you can get pre-approved for. Knowing this, I have started thinking of ways to improve my ratio. I will be the only one on…
ZRedford
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How is debt to income ratio calculated by mortgage lenders? (what is the source material)

I was thinking about this as I was writing a comment for this question. I wanted to make a point that is the OP paid his credit card in full before each month's statement was generated (so that the statement balance read $0) then that is the amount…
Brian R
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How does DTI work while building a house?

Lenders are pretty consistent and clear about how DTI (debt-to-income ratio) is calculated and the limit of 45% for a traditional mortgage against a primary residence. New construction loans seem to follow these guidelines. However, I'm unclear on…
Nicholas
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Is this a valid strategy to reduce interest payments for student loans?

I kind of messed up and didn't pay my unsubsidized grad schools loans while I was in school, so I have quite a bit of interest accrued. In total there are 5 loans and they come to about $100k. All of the loans are currently in grace/deferment…
Sentinel
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How do I compute the adjusted debt-to-equity ratio for a Treasury Stock?

I want to compute the adjusted debt-to-equity ratio. The formula is simple: ADE ratio = Total Liabilities divided by Total Equity and Treasury Stock. When I look for Treasury Stock for MSFT (https://seekingalpha.com/symbol/MSFT/income-statement), it…
J.Doe
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How do rental income/costs factor into a debt to income ratio for a home purchase?

If I own a house that I rent out, and I apply for a mortgage to purchase a new primary residence, how do the rental income and costs factor into a debt to income (DTI) ratio for that new mortgage? My understanding so far is that the 'front end' DTI…
tom
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How to go from Good to Excellent Credit for Free?

I looked up my Fico score for the first time in March of this year--it was 766. At that point, I had two credit cards, one that I used for almost everything and a store card that I hardly ever used. The following month, I applied for a margin…
AffableAmbler
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How to take advantage of record high household debt in Canada?

The Canadian household debt/disposable income ratio is currently (December, 2010) at a record of 1.48. Reference: The Globe and Mail - Household debt ratio hits record. What are some investment products, ideas, or strategies which would allow one…
marco
1
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3 answers

Should I avoid credit card use to improve our debt-to-income ratio?

We put all our expenses on a credit card and pay it off every month in order to get maximize our cash back. We never charge more than we have in the checking account, so we always pay it off. Should we reconsider doing this in order to improve our…
JHFB
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