Debts Paid By Others

If a debt is reflected on the borrower’s credit report, the borrower is personally liable for the debt and it must be included in the debt-to-income ratio. Debts paid by the borrower’s business or by someone else can be excluded from the debt-to-income ratio with any of the following supporting documentation:

Most recent six (6) months’ canceled checks drawn on the business account;

Tax returns reflecting the business expense deduction; or

Business bank account statement showing assets remain after funds to close and reserve requirements are with a balance greater than or equal to the balance of the debt; or

Evidence that the debt is paid by someone else for more than six (6) months; or

If debt is newly issued there must be a minimum of four (4) payments; and

If there be any inconsistent payments, then a LOE and supporting documents will be required.

Note: For mortgage debt paid by others, twelve (12) months’ canceled checks drawn and history of evidence is required.