Debt to income ratio

[sap1227]

We have been getting rid of our debt and I like to see the improvements in our "debt to income ratio". The calculator I just used said that first mortgages are not included in the ratio calculations. Can anyone confirm that when lenders took at your debt to income they do not consider your first mortgage?
Thanks,
Christy

 

[KimRaye]

Sounds vaguely familiar but, I can't confirm.

 

[bsnyder]

If you are applying for a new mortgage, the lender wouldn't use your existing mortgage payment in the calculation, but they would use what your new payment would be.

If you're applying for a 2nd mortgage, or a car loan, or other type of installment loan, your first mortgage would certainly be included in the debt to income ratio.

 

[sap1227]

Thank you! Without our mortgage we have a great ratio, our mortgage throws it off some--we are 25 now and bought the largest house we could afford at 22. The week after we closed I found out I was pregnant with DS. I quit my job (the breadwinner) and now work part time at a grocery store. We got into a little bit of CC debt, but now we are back to making more than we are spending (we had a nice amount saved when DS was born, it is amazing how fast you can spend your savings!!). I plan to get rid of all CC's and 1 car payment by the end of September. Even still our ratio will be high because of our mortgage payment. Oh well. DS will be in school in 4 short years, I have no regrets!

Thanks again for the input!

Kim-I am a huge Cubs fan, it is so nice to have them in first place!

 

[KimRaye]

Originally posted by sap1227
Kim-I am a huge Cubs fan, it is so nice to have them in first place!

It IS, isn't it?!! I'm going to the game on Sunday!!


And, good job on the debt ratio! You've done better than me and, I've been home for 5 years now! Probably going back to work in September so, we'll be back to 2 incomes, ourselves.