Home Loan Question on overall debt-vs-DTI
#1
Thread Starter
Home Loan Question on overall debt-vs-DTI
Here's my question. Is it better to refinance and lower my Debt-to-income ratio OR use my down payment I've saved up to pay off overall debt and maybe lower my ratio?
In another scenario, is it viable to sell a vehicle to pay off debt's and/or secondary vehicle while getting another vehicle and adding to overall debt even though the payment would be lower thus lowering my debt ratio?
Just weighing my options and trying to figure out the most reasonable plan of attack.
Thanks for any advice in advance!
In another scenario, is it viable to sell a vehicle to pay off debt's and/or secondary vehicle while getting another vehicle and adding to overall debt even though the payment would be lower thus lowering my debt ratio?
Just weighing my options and trying to figure out the most reasonable plan of attack.
Thanks for any advice in advance!
#2
What is the purpose of lowering your debt/income ratio? Sounds like some of your options are based on actually increasing the debt to income ratio, but decreasing outgo to income, which does make sense to me, but may not be prudent in the bigger picture. Refinancing may lower your mort payment, but increases your debt since you are starting over, eliminating any principal payments you have made to this point on the house. Selling a car/toy would be the only option (shy of using up your saving to pay off debt) to actually working in a positive, but that’s only if you can live without that toy/car and not accrue more debt by replacing it with something else now or in the future. If not, the question then becomes a personal one, is it more important to you to have a higher debt/income ratio and savings in the bank for emergancy, or no savings and a lower debt/income?
#3
Thread Starter
I'm trying to lower my payments and DTI ratio in order to get a home loan, currently renting.
The scenario is where I could sell a vehicle and pay off some debts but then I'd need to purchase another vehicle which would have a lower payment than the current but add to the overall total debt. It's confusing to a point but makes some sense in my head.
The scenario is where I could sell a vehicle and pay off some debts but then I'd need to purchase another vehicle which would have a lower payment than the current but add to the overall total debt. It's confusing to a point but makes some sense in my head.
#4
I'm trying to lower my payments and DTI ratio in order to get a home loan, currently renting.
The scenario is where I could sell a vehicle and pay off some debts but then I'd need to purchase another vehicle which would have a lower payment than the current but add to the overall total debt. It's confusing to a point but makes some sense in my head.
The scenario is where I could sell a vehicle and pay off some debts but then I'd need to purchase another vehicle which would have a lower payment than the current but add to the overall total debt. It's confusing to a point but makes some sense in my head.
Is there not a loan officer you are working with that is advising you on how to possibly manage your DTI/loan goal?
#5
talk to a reputable mortgage broker that is familiar with your area first. Different lenders like to see different things. Some are sticklers for DTI, so technically it would be better to have lower payments and more debt even if it was newly financed. Some want a higher downpayment b.c of your location, credit history, work history; etc.
Basically a broker/banker will be able to talk you through this. Don't be shy to talk to a couple of different brokers and bankers at different banks.
Basically a broker/banker will be able to talk you through this. Don't be shy to talk to a couple of different brokers and bankers at different banks.
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