Comments on: Do You Know What Your “Debt-to-Income” Ratio Is?

By: J. Money

J. Money — Thu, 18 Jul 2013 14:46:39 +0000

In reply to JKN.

Nice man! You seem to be doing well over there :) I hear ya about wanting to upgrade cars too – I get in that mood every two years or so, haha… it’s tough to hold back! But really at the end of the day it’s just a matter of priorities and what’ll make you happiest. Is it paying off more mortgage and possibly saving more later? Or rockin’ out in your new car around town every time you jump in? No right or wrong answers in my opinion – just a matter of weighing pros and cons and then choosing one. Or maybe even waiting a year and *then* making a decision? It can be hard having a nice balance between going the financially smart route vs the “being happier now” one :) Good luck!

By: JKN

JKN — Thu, 18 Jul 2013 06:28:18 +0000

In reply to JKN.

If I wait any longer I could end up driving a Prius! – lock in jan. with a 1.74% 5 year loan from my local credit union…

my credit is 720+…

By: JKN

JKN — Thu, 18 Jul 2013 06:25:20 +0000

I just calculated mine and I am at like 33%. I can pay off some bills and get it down to 27% by October.

I am 30 years old, and want a new car. Probably bring 10K cash in January to buy it but it would move me back up to 33% (this includes expenses gross).

The only debts that would make up the 33% in January would be Car+Mortgage. I have no student loans…

Kind of confused because I did some calculations and I can put away about 20K a year towards my mortgage. If I pay about 40K (2 years worth) at this rate and do not get the car i won’t have to pay Mortgage insurance (i am a new home owner) and that would drop my monthly payment roughly from 1870 to 1570…

I am at a crossroad I have a car that will make it another 2-3 years (has 110K miles on it) but I am 30 and want a v8 camaro (lol)…I can probably get to 200K miles on it I did all the scheduled maintenance on it and that cost like 2K…

I am also single, so don’t know how my ratios would do if I got into a serious relationship and got married with a second earner earning something around me with just maybe school and car loan debt…

Any advice for this single bachelor? hahaha

By: J. Money

J. Money — Sat, 02 Feb 2013 14:31:17 +0000

Awesome!! That sounds fantastic :)

By: American Debt Project

American Debt Project — Fri, 01 Feb 2013 20:25:51 +0000

I’m at 8% for my 3 remaining debts, and 20% if I include my fiance’s car since I am the cosigner. I hope to be at 0 for myself by this summer!!

By: Monica Toress

Monica Toress — Wed, 30 Jan 2013 15:08:56 +0000

Wow, 19.4% is an awesome DTI ratio. Mine is 27% but I am working on decreasing it significantly but seeing that I am still in the green zone made me a little more comfortable.

By: J. Money

J. Money — Tue, 29 Jan 2013 18:05:57 +0000

Wowww good info!! Thank you!! Crazy about the millionaire stuff, I bet it gets wild with that!

RE: rate I’ve been offered – I haven’t gone much farther than asking for info and seeing what my options are, but I’d hope it would be around 3-3.5% or else the whole refinancing starts not looking as good with this new plan of mine… Though I’d probably still take it ;)

By: Carla

Carla — Tue, 29 Jan 2013 16:58:30 +0000

Keep in mind that for a mortgage situation, it’s not quite this simple. The debt part is everything that shows up on your credit report, including any loans you’ve cosigned for but don’t pay on (a kid’s car, or student loans), and minimum payments for credit cards that you may pay off monthly. (So if you do all of your shopping on a credit card for reward points and pay if off monthly, effectively spending only cash, this credit use will be counted against your DTI ratio.)
Valid income is only pre-tax income that is guaranteed by contract or has been on your tax returns for two years. If your income has been declining or fluctuating (i.e. self employment, commission, or tips), you must use the average of two years income from your tax returns, and declining income almost always eliminates that income source from consideration. Generally, depreciation won’t be counted back in, and any business losses will get counted against your income regardless of what you pay yourself. And god help you if you get dividend income. I’ve seen multi-millionaires get denied for small loans because their income comes from investments and isn’t considered reliable.

May I ask what rate you’ve been offered? Last I checked, Chase was far from the best on the market.

By: KK @ Student Debt Survivor

KK @ Student Debt Survivor — Tue, 29 Jan 2013 04:13:12 +0000

Mine was zero up until last spring when we bought out condo. Now I’m going to have to do mine and bf’s to see where we’re at. Thankfully the mortgage is the only debt either of us has.

By: J. Money

J. Money — Tue, 29 Jan 2013 03:11:09 +0000

In reply to Financial Black Sheep. Yeah bitches!