Some clients get a bit frustrated that minimum monthly credit card payments are counted against them in their debt ratios, even if they pay off their credit card bills every month. First, the underwriter can’t assume that the client pays them off every month. Second, if you are spending about $3,000 every month on your credit cards, for example, and usually pay that amount off every month, and the minimum monthly payments are $150 a month, it seems pretty fair if you are spending $3,000 a month to only count $150 a month against you in your debt ratios.
It seems we are still in a banking environment where no one cares about debt-to-income ratios (DTI), which is astonishing. Isn’t this one of the things that got us in trouble in the first place? Read the rest of this entry »