Article originally posted on www.mpamag.com
When a person is obligated on a mortgage debt – but is not the party who is actually repaying the debt – the full monthly housing expense may be excluded from that person’s recurring monthly obligations when they go to buy their next home if:
- The party making the payments is obligated on the mortgage debt,
- There are no delinquencies in the most recent 12 months, and
- The borrower is not using rental income from the applicable property to qualify.
In order to exclude the mortgage debt from the borrower’s debt-to-income ratio, the most recent 12 months’ cancelled checks (or bank statements) from the other party making the payments that document a 12 month payment history with no delinquent payments must be obtained.