Hi,
Question regarding a one-pay lease and how it would affect one’s credit report, especially when it comes to DTI calculations for a mortgage qualification. Does a monthly payment show up, and if so what would that be? Appreciate any feedback/insights.
From one GM lease that is a one-pay. It shows as paid off with $0/monthly but YMMV.
@azwldct07
on the one pay lease i did in the past, it showed up as $0 monthly payment but an active account.
As for it’s effect on a mortgage, supposedly that’s lender specific. I recently heard that unless you own (not lease) another car, the lender will assume that you will need to lease another car in the future and somehow hold that against your DTI ratio. If you owned another car outright, then you can make the argument that once the lease is up you will drive that car and there won’t be another lease. Let’s say you’re a married couple and lease two cars, one is a one pay lease, i feel like you could make the argument to lender that once the lease is up, you won’t need another one because “your wife will stay home with the kid” and you will consolidate to one car. But i’m told that it might not fly with some lenders.
It would really be a question for the lender or mortgage broker and it’s not an easy one to answer because they will likely not know the answer and will have to get clarification from underwriting.
Maybe @Alex can chime in on this, he’s in that biz if i’m not mistaken.
Most of the time it will not affect your monthly. That being said- It depends on the lender. I’d save proof/evidence that you owe a $0.00 monthly on it. The balance will be there but as long as there is no monthly debt obligation on it- it should not hurt your DTI. For situations like these I’d find a reputable lender because sometimes they might say they can do it according to the banker and then the UNDERWRITER might turn around and say no- we’re going to hit your for x.xx% of the balance. So I’d be weary of that.
Thanks all, really appreciate it!