Is There Ways Of Excluding Debts From Co-Signed Loans?

Mortgage loan borrowers who are co-signers on debts often have a hard time qualifying for mortgage loans because the monthly payments of the main borrower is included in the calculations of their debt to income ratios. There are ways of excluding debts from co-signed loans but they are strict and a mortgage loan originator who is planning on excluding debts from co-signed loans needs to carefully examine the payment history and how the debts are paid on a monthly basis by the main borrower and see the paper trail for the past 12 months. The main borrower needs to prove that he or she has been making timely payments for the past 12 months with a bank check and/or online via online payment. You cannot have the main borrower be late on any payments in the past 12 months or the deal is off and cannot exclude debts from con-signed loans if there has even been one late payment. Borrowers who paid cash on co-signed loans cannot have the debts of the co-signer excluded from co-signed loans. Cash payments does not count. All monthly payments will need to be documented.

Monthly Debts That Someone Else Pays: Are They Exempt From DTI?

There are so many cases where I get calls where a mortgage loan borrower gets a last minute denial due to their mortgage loan originator making the mistake of excluding debts from loans that is just under the mortgage loan borrower’s name but someone else has been paying for the monthly debt payments for the past 12 months. Unfortunately, if the loan is just under the mortgage loan borrower’s name but the monthly payments are being paid by someone else, the debts on the loan is considered the main borrower’s and cannot be excluded from the debt to income ratio calculations. To be able to exclude the monthly payments from the mortgage loan borrower’s debt to income ratios, the mortgage loan borrower needs to be classified as a co-borrower and not just as the borrower. Many times, a parent may just help a child to get an auto loan but will not be listed as a co-borrower and just the borrower and the child many be paying the auto loan payments for over 12 months. With this type of case scenario, even though the child has proof of paying timely auto loan payments and the insurance card is in the child’s name and can provide 12 months canceled checks that the child has been making the payments directly to the automobile finance company, this debt cannot be excluded from the main borrower’s debt to income ratios. On the flip side, if the child were the main borrower and the parent was the co-signer, and the child can provide 12 months canceled checks and/or 12 months bank statements that the child has been making timely payments online for the past 12 months, then the monthly car payment can be excluded from the debt to income calculations of the co-signer ( parent ).

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