I have nothing in collections. My payments are on-time but my credit card utilization is a bit high. I will lower than in the next week or so by a considerable amount.
Which factors do they count when looking at debt-to-income ratio? Is rent/mortgage included? Or just credit card and loans? Do they compare it to what you’ll be making when you enlist?
I want to make sure before I even put an application in. Needing waivers doesn’t look good, especially when competing with the first-class citizens fresh out of high school and those sexy jobs. I just want see if I need to mitigate anything before going in.
Thanks for your time.
This is a serious concern I have with our profession. It’s currently happening with physical therapy. With the continuing scope creep that doesn’t look like it is getting better, supply for “providers” will increase. Of course the demand is high and increasing. This group is very focused, and should be, about the risks facing our future profession so I wanted to get the general points of view from here. From my understanding ED residents are already having a hard time finding jobs so it’s already happening.
PS: I’m not posting this to debate. I’m genuinely curious about the general opinions of the subreddit. I’m confident there are many, including attendings in the group, that have much more info on this.
I will be applying for a construction loan for a new house in the next 6 months or so. I have good income and a credit score above 800.
I was talking to someone today that mentioned the importance of debt-to-income ratio when applying for loans and my question is this:
I have about $60,000 of remaining student loan debt (medical school) and right now the terms are for a higher monthly payment as we've prioritized aggressively paying it down.
However, does it benefit me to refinance this into a much smaller monthly payment so I'm more likely to get a favorable mortgage based on a better appearing debt-to-income figure?
Thanks!
First off, a little background. My wife and I bought a 4plex in Los Angeles at the beginning of 2014. We lived in one unit and rented out the other three. Our tenants covered the mortgage so we were able to save up money while essentially living in LA for free. After a few years and some increased rents we started looking for our next property. We were looking for a house for ourselves in a neighborhood with better schools. We'd have some increased cash flow from renting out our unit so we thought we'd be able to afford more, but it turns out we're actually still limited by our debt to income ratio.
Banks want to see a debt to income ratio of less than 43% for a conventional loan. So, unless the 4 plex rents for 2.34 times the PITA, it will diminish our lending power for the next property. Considering that most investment properties being sold in LA aren't even close to that, is investing in LA a fool's errand? It feels bizarre to have increased our monthly cash flow by thousands, but being able to afford less for our personal home in the process. How do other people seem to amass property after property?
On a positive note, our neighborhood has greatly gentrified since 2014 and rents have almost doubled. We've done full remodels on 2 of our rental units and we're starting the 3rd right now. We're hoping to have it finished and rented in early spring. And believe it or not, the rents have gone up enough that we will have finally crossed the debt to income ratio for the property. In reality, the rents from the 4plex will cover it's own mortgage and the mortgage of our personal home. I'm not complaining at all, but it's taken us 7 years, some great fortune with the neighborhood, and a lot of remodel work to get here. I'm just surprised at how difficult it has been to take the next steps in investing...
... or is this just happening to me?
If I use Blockfi for a loan and collateralize bitcoin, for say, a down payment on a house, would that loan not effect my debt to income ratio that mortgage lenders look at in a massive way?
So I'm STILL working reduced hours since last March, I pulled my 401k to pay off a personal loan and pay off debts that I couldn't continue to pay off of reduced income and now I want/need to save even more. I only have a few hundred dollars left to pay off on a credit card and that will be done with. I just checked my credit scores and they're all just over 800
As far as debt that can be refinanced I have a home loan and a car loan
Car is 4.75% with $4,184.10 left on it and $252.20 monthly payment
House is $90,570.17 at 4.5% with $655.10 monthly payment
The only one I could realistically refinance is the car loan but my monthly income is only $1300 so my debt to income ratio is too high. Plus another 300 a month for my roommates rent but who knows how much longer that's gonna last
Hi, i'm starting to max out my debt:income ratio (all my properties are in my name) and although i have a stable full-time job, its becoming more difficult to acquire more properties using conventional loans from the big banks. what is the typical next step in this situation? start bringing in partners? pay off some of the existing mortgages to reduce my leverage? thanks!
My apologies in advance, this might be long.
My husband was recently let go from his job. He did a lot of research and decided he wanted to join the Air Force. He set up an appointment with a recruiter nearby and took a practice test which he scored a 78, I believe. He’s 5’8 and weighed 120lbs. The recruiter told him to gain at least 3lbs and come back with hs diploma, and birth certificate. The diploma is taken care of, we are waiting for his brother to mail us his birth certificate (his mom had it locked in a safe). His weight is up to 124 according to our scale at home. He’s been doing push-ups, sit-ups, and running. He can do more than is required to enter basic training.
My goal is to be as supportive as possible. While I was attempting to look up locations and jobs and other random things, I ran into something saying his debt-to-income ratio had to be no more than 40%. So my questions are (I tried searching in Google and in this sub but didn’t find what I was looking for):
Is my income and debt also factored in?
Is BAH factored in?
I had surgery last year and paid the medical bills with credit cards. And on Jan 29 of this year my uncle passed away from covid-19 (I’m listed as his next of kin) and had no life insurance so I just paid for his cremation with credit also. We also have 2 car payments, but one is paid by my son since it’s his car but it’s only in my name. Nothing is behind or in negative status.
I am currently collecting unemployment, does that still count as income? Side note: I began collecting unemployment before COVID attacked due to the company I worked at for 10 years being sold to a company overseas.
I also noticed a dependent waiver will be needed. I have an 18 year old son (still in school) from a previous marriage, is he included as a dependent?
But are planning on FIREing more than a decade before your partner: Do you feel any sort of resentment or annoyance that you are suddenly going to have all this free time and they aren't? Have you tried to get them to think about FIREing with you? What do you plan on doing with your time while your partner is at work?
Hey all! I am in the process of looking/financing my first home. I can "afford" it but my potential lender is saying I cant because I have over 53% debt to income ratio. I virtually have no debt except car payment, student loans and the kicker is a huge child support amount which wont be coming down.
With all of that put together it puts me over that percentage. Is this an everywhere thing with each lender? If so do other lenders have different percentage ranges? This is in the state of VA by the way, not sure if that helps. Just wondering becuase it seems either make more money or pay off student loans / car which both in total are over $19k.
Thanks for the help!
EDIT:
This is an FHA Loan looking at a: $125k income
taken from it is: 2000 in CS
421 for car loan
250 for student loans, everything else has been paid off!
Hi, I was looking to apply for credit card and the main factor they consider is that Debt to Service Ratio. My income is 2900 Monthly (Gross) CCB (Other Income) 1200 My minimum card payment is $15 What would my Debt to Income Ratio be and would my Rent and Cell Phone Payments be included it bc on my credit ratio it lists cell phone accounts and payment. I’m afraid if I apply I’ll get denied due to the high Debt to Income Ratio. What is my ratio? Thnxs
There are some programs that will not calculate the monthly loan payment having less than 10 payments remaining. I believe FHA is one of them but not sure.
Does the VA calculate the month loan payment of the loan regardless of the number of the remaining payments?
https://www.newshub.co.nz/home/politics/2020/11/reserve-bank-wants-to-introduce-debt-to-income-ratios-in-new-zealand-governor-adrian-orr.html
Salam, can someone help me find some sources for the 30% debt to income ratio rule for investing in stocks. I wasn't aware that you had to look at debt to income ratio before determining if it is a halal stock to invest it. I always thought if the company's predominant source of income was halal, then it was a halal stock to invest in. I would appreciate some clarity.
I'm literally 1% over the debt-to-income ratio due to my high pension contributions. My mortgage advisor can't officially advise me to pause pension contributions, however, I know that it is quite common for people to do so. What are the risks?
I use my credit cards every month to pay for normal expenses and accrue points, but I always pay them off. The only debt I have is a student loan, credit card, and mortgage. Do the cards also count? Thanks!
Started looking at into loans that require have a minimum requirement of some debt to income ratio (DTI), but I’m confused on what it actually means. Maybe I’m over thinking it, but does it means that a higher DTI is bad? Or is a lower DTI better? Just confused, thank you in advance.
Hello all I am currently trying to refinance my student loans from sallie mae where I pay 900 a month and that alone takes up 50% of my income for the month, now I do have a cosigner and I never missed a payment. What is the best place to refinance student loans with a high debt to income ratio?
What is your current debt-to-income ratio? how much of your paycheck (solo or combined with your partner do you use)
I'm starting to look for a place in NYC and even though I have a good salary and a good 30% downpayment, Im a little scared to ask for a loan. All my friends have a mortgage but my parents never needed one (those days are gone...) so they make me feel bad to buy a house with a loan
What happens if I can't pay for it anymore? Can I sell it? do I lose all my money? is there a calculator out there to simulate bad scenarios?
Thanks!
When applying for a personal student loan, what is factored in?
Monthly income vs ALL DEBT, or monthly income vs credit card debt....Credit score, etc?
If student loans are deferred, and not a payment obligation currently, then is that factored in?
What are the companies that are most lenient?
I was able to get a private loan in August from Discover for $2000 with a credit score of 712 and no outstanding debt except federal loans (that are deferred) and now they are denying me. Are they denying me based on the loan they gave me originally?
Please no lecturing on loans, I get it already. I am not taking out an exorbitant amount.
Hi, I currently have an single member LLC/S-Corp looking to qualify for a rental property soon. According to my tax return from 2019, My net profit is $63,000. My debt to income ratio using my 2019 $63k is is right around 50% which is too high. I have about $35,000 in long term capital gains from selling stocks this year in 2020. I did not have substantial long term capital gains in 2018. For qualifying in 2021, does the $35k in stock sales help lower my mortgage debt to income ratio? Does long term capital gains increase the income used to qualify for a mortgage? Thank you!
I’m not sure if this is the right subreddit, but I could use some advice. I bought a home before I got married it is in another state and has had tenants in it for 5 years now. It makes a nice profit that we use to pay my wife’s student loans, and put away for a baby fund. I have 12 years worth of equity in it, plus appreciation.
In December 2019, my wife went on maternity leave-we used the baby fund; Covid hit in March; and she lost her job end of March. She was able to access all her clients though and decided it was better to start her own company and keep doing her thing. Meanwhile in April, I decided to refinance our primary residence. Because my wife was busy starting her start-up, I just refinanced the property in my name only.
An opportunity has presented itself to buy a third rental property and I would like to buy in. When I contacted my bank about a HELOC they stated my debt to income ratio was 70%. They did not count my wife’s salary since she only has 2 months worth of time in her new job, and no paycheck December till March. They stated that since both liabilities are in my name only the debt to income ratio was too high. This is in addition to standard liabilities like cars, 37 new windows, and student loans.
I asked about a cash out refi on my rental property and they said that was not possible since it is not owner occupied.
Are there other suggestions for how to access some of my equity? Is this going to be the story at every bank? Thank you all for your feedback
Edit: just wanted to say thank you all. I have a call tomorrow with a smaller bank I’ve held an account with for awhile and the. I’ll start hunting small banks near me. I appreciate the ammunition of discussing other types of loans other than the typical heloc, refi that I thought of and will start running those down soon too.
My parents are looking to buy a house and have a car payment that is quite large, I believe it’s $700, if they refinance it they could drop the payment to about $300. Is it better to have 2-3% higher debt to income and keep it the way it is (39-40% debt to income in the price range they’re looking at) or refinance now and lower debt to income to about 36-37%?
I am new to home buying/shopping and unsure what to include. My wife sought out pre approval this morning.
We got approved for 510 purchase price. 3220/mo 48000 down including closing costs And it says 45% debt to income ratio
I am not sure why it’s 45%?.. from what i understand that is just the % of our monthly gross that we spend on debt. I spent 413 on a car loan and that’s it. We make 150k/year. So that’s 12500/mo gross.
We have credit cards but paid off each month.
I’d need to be spending about $6k/mo on debt to be at 45% surely?!
I consider myself to be pretty clear on most financial terms, but I still can't figure out what goes into calculation debt to income ratio. Pre-tax income? post-Tax income? Housing? Would love an explanation of this. Googling hasn't cleared this up.
My partner and I are starting our journey to our first home but the expensive, super competitive San Diego market is going to be tough to tackle. We should be able to make it work but we want to make sure we’re going to be able to get the most house we possibly can, because in the range we’re looking a few thousand dollars can be the difference between a bad house and a good one.
We currently have no recurring debt other than $8,000 left on a car with the payment at $220 a month. We have the money to pay that off now, but should we? It also wouldn’t greatly impact the down payment we’re planning to make. It seems to us like having that $220 a month go to our mortgage payment seems like a better plan since in the price range we’re looking, every little bit helps. There’s also the chance the credit score is within 5 points of the next tier.
Are there any downsides to paying off that car loan? That monthly car payment is only about 3% of the monthly income, but it’s still something. Will it cause his credit score to change at all within say, three to six months? He has a decent credit history so we’re not so much worried about continuing to establish it with that car loan, we’re more wanting to increase our buying power as much as we can.
Any tips or insight into this would be greatly appreciated!
I’m trying to decide on buying a primary residence or another investment property first. I don’t want to buy the residence and then have so much debt that I can’t get a loan for the third property. What is the best way to calculate and solve this problem of which to buy first?
I have nothing in collections. My payments are on-time but my credit card utilization is a bit high. I will lower than in the next week or so by a considerable amount.
Which factors do they count when looking at debt-to-income ratio? Is rent/mortgage included? Or just credit card and loans? Do they compare it to what you’ll be making when you enlist?
I want to make sure before I even put an application in. Needing waivers doesn’t look good, especially when competing with the first-class citizens fresh out of high school and those sexy jobs. I just want see if I need to mitigate anything before going in.
Thanks for your time.
Does other source of income such as ccb count in debt to income ratio and also does household income count too.
