The most common debts borrowers try to omit from their DTI are:
In order for any of these debts to even be considered for omission, certain stipulations apply.
One exception is that Conventional guidelines do not permit the deferment of student loans. If you are applying for a Conventional mortgage, you will have to count the estimated payment into your DTI regardless of how long the loan will be deferred.
Government loans (FHA, VA, USDA) allow for the exclusion of student loans if it can be proven that they are deferred greater than 12 months after the funding of the mortgage.
Further, the loan applicant must be a co-signer on the car loan, and not the primary borrower. This means that the person paying for the car loan must also be on the car note as the primary borrower.
A car lease, however, can never be omitted from the DTI. When you turn a leased car into the car dealership, it is expected that you will lease or buy another car, incurring a debt that would be similar to your current car lease payment.
Conventional and Government guidelines allow for the exclusion of car loans paid by someone else if the above documentation is provided.
Conventional and Government guidelines both allow for the exclusion of these debts, but some lenders could have a credit overlay that is impossible to overcome.
When attempting to omit business loans, remember that it is always easier to prove that installment loans are paid by a business because these loan payments have a fixed amount.
Revolving debts have revolving payments, so it is extremely difficult to prove that a business has been paying for this account for 12 months.
Documentation that is necessary to prove that a loan is paid by a business includes, but is not limited to:
Read more here:: Excluding Debt from your Loan Application