Tag: Debt

Utilities Being Counted from Credit Report

Question: My client’s credit report is reporting utilities, and our investor is requiring that we count those in the DTI.  I didn’t think that utilities counted, did I miss a guideline update? NEW MTP™ Credit Reports – Debt Obligations That Are NOT Counted as Debt – FHA Loans Answer: FHA does not require utilities to […]

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Using Secured Funds as Collateral for Eliminating Debt Obligation

Question: Our applicant paid off their car loan with another loan secured by a CD that they have with their bank.  Do I need to count this payment against them or is this like a person using a loan against their 401k? Answer: The payment on this collateralized loan would not have to be counted […]

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Fannie, Freddie, FHA and USDA – Installment Debt Under 10 Months – Will any of the agencies not count debt that is paid down to 10 months or less?

FHA Answer: Unfortunately, FHA does not allow for debt to be paid down to the 10-month payment level in order to exclude it from the DTI calculation.  See the full guideline below. Reference: 4000.1, II, A, 4, b, iv (A) General Liabilities and Debts (TOTAL)The Mortgagee must determine the Borrower’s monthly liabilities by reviewing all debts […]

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