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…
Was it BostonHouseConcierge by chance?
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LOL Negative!
It was my man Keith who I think is the absolute best in the business.
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Man that would make me uncomfortable
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Well that doesn’t take into account my spouse’s income so it’s not a true DTI but I’m the only one on the loan which is why it looks so ridiculous!
That definitely would make a difference
If I pay up the remaining months and return the vechicle early, will the lease account get closed on my credit report? Will returning early harm my credit in any way?
This article says it’s much better to “buy and sell the car yourself” than returning early and paying penalties. Anyone knows if returning early could harm credit as well?
Please see my post above
No but you’re literally taking a match and lighting money on fire if you do that
Transfer is best but it may take too long
I suppose in your case the amount was paid off but you’re still driving the vehicle (i.e., not returned).
I paid all of the remaining payments and am keeping the lease until it expires
One of the banks removed it from my credit report and therefore, DTI was affected. The other did not.
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With all the money you make I’m surprised you even had to think about DTI!