Credit Report Debts/Liabilities – Homebridge Wholesale

Our HELOC uses the Equifax Decision engine tool for the credit standard review.

Installment Debt:

Installment debt is a monthly obligation with fixed payments and terms. Payments on installment loans must be included in the Borrower’s debt-to-income ratio. Payments can be excluded if there are ten (10) or fewer monthly payments remaining to pay the debt in full.

Installment debt paid down prior to closing can be excluded from the debt-to-income ratio.

Note: Lease Agreements may not be excluded or paid off to reduce the debt-to-income ratio

Revolving Debt:

Revolving debt is open-ended debt in which the principal balance may vary from month to month. The minimum required payment as stated on the credit report or current account statement should be used to calculate the debt-to-income ratio.

Revolving accounts are allowed to be paid at closing in order to exclude the payment from the debt-to-income ratio.

Student Loans:

When a monthly student loan payment is provided on the credit report, that amount may be used for qualifying purposes.

If the credit report does not reflect the correct monthly payment, the monthly payment that is on the student loan documentation (the most recent student loan statement) may be used to qualify the Borrower. For loans in deferment or forbearance, if the credit report does not provide a monthly payment, it must be determined using one of the options below:

If the Borrower is on an income-driven payment plan, student loan documentation maybe obtained to verify the actual monthly payment is $0. The Borrower may then qualify with a $0 payment.

For deferred loans or loans in forbearance, the following must be calculated:

A payment equal to 1% of the outstanding student loan balance (even if this amount is lower than the actual fully amortizing payment); or

Fully amortizing payment using the documented loan repayment terms.

Litigation:

Any known and active litigation involving the Borrower, including bankruptcy, foreclosure, deed-in-lieu, pre- foreclosure, short sale, judgments, tax liens, collection accounts, and charge-offs are not allowed and will be an immediate denial.

**PLEASE NOTE**

The revolving debts' balance from the credit report will always be used. We cannot use a paid-in-full document to remove the revolving debt from the DTI