Thanks for all your insights! Does anyone knows that: For a $40k-$60k car, if I do buyout to get out of lease early, how much more is it gonna cost compared to purchasing up front?
When I checked mine, car leases showed on my credit report with a balance that represented the sum total of the remaining payments. So, if there are 10 payments of $200 remaining, on your credit report it will show as a $2,000 balance.
It’s also very important to know that it depends on the leasing bank and how they handle this/how it affects your DTI.
I paid all the remaining payments on my Tundra lease through Ally. Ally effectively closed the account and the payment shows as 0 as far as DTI goes
I paid all of my remaining payments on my Jaguar lease through Chase. Chase will not do the same and it still shows as $517/month despite all remaining payments being made
I would have to do a lease return or pay the entire balance and buy the car for it to be gone.
All of the above was done by choice before I knew 100% I was buying a house, but when my mortgage broker did the credit pulls, I found this interesting.
5 Likes
This difference between leasing companies is interesting Mike. I will check mine and see how BMW FS and Toyota financial report a lease payoff.
1 Like
I would have thought that this might have been changed since the last financial crash, but I was also surprised at how high the DTI limits are. Way too high for my comfort level…But then again, I also don’t take on leases more than ~0.5% per month of MSRP either, so I am generally a wimp!
Jag lease ends 6/1/21
They’ll send a letter saying all payments made but stays on credit report w $517.xx
And please, no one blast me for the % of MSRP metric, LOL.
2 Likes
Few points,
Look for a mortgage you can “realistically” afford not what fits perfectly/snuggly in your budget.
Mortgage companies usually like 30-36% DTI so if you’re lease/loan is going to put you over that, you need to re-think the purchase. Do not over extend your self.
Car loans and car leases both report as installment accounts.
No.
I think I would 
if my DTI was anywhere near 30%.
2 Likes
Where do you live?
Limits near me are 45%
Someone get him a medic. MEDICCCCC!
I was floored when one LO I was working with said I can have a DTI of up to 49% and he could usually squeak loans through with 51% or 52% in some cases, especially with high score/clean applications like mine 
1 Like
Definitely higher threshold in higher cost of living areas…
At least it’s not pre-2008 lol
I was told ~36-38% would fly in my area (Tampa, FL).
Depending on the lender, even if the full lease term is prepaid it may report as ongoing current payments on a liability on your credit report. There’s another, often overlooked piece – if you have an auto lease nearing lease term end on your credit, some mortgage lenders will factor in the payment even if you intend to return the car (logic being that you’d need to lease or buy another one).
@Bismarck is correct - just because you don’t have a current lease on a car, if they see one that just “finished” or will finish, they expect you to get another car – the underwriting algorithms are now pretty sophisticated with AI (gasp) (cough)
Just closed on my house on Monday and the lender asked if it was possible to transfer my MINI lease into my husband’s name so it would no longer reflect as a debt each month on my credit account because it made such a difference. That $330/mo drastically changed my DTI and made my mortgage limits $40k less overall, and with it I’m sitting right at 43%. (Tampa, FL)
That’s a non-trivial difference…