Question about lease ending, getting another lease, and DTI

Ask the Hackrs
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1

Hope all is well!

I have a Jeep lease ending within 2 months. Meaning 2 payments left. In fact one of those 2 payments is due in a week.

I have since ordered a new Jeep and it’s here so I will start financing next week.

I am wondering. Will the old car contribute to my DTI with only 2 payments left? If so, can I just pay the last two payments early and have it not count towards my DTI? Would a letter proving it’s paid be needed etc?

I don’t want my old lease to contribute to my DTI when doing paper work for my new car, but I understand it may take a few months before it shows the lease is closed. Having only one payment on my DTI makes my DTI at 34% but having both would take inflate my DTI.

2

The bank can see you have 2 payments left so unless there is another problem with your credit you should be fine.

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3

If you’re taking out a mortgage in the next two months, make those two payments. Otherwise who cares about your DTI for those two months

What’s the deal on the new Jeep because they are generally terrible ownership/resale candidates?

4

No mortgage. Only rent. I just have this new order that has come in. I actually just paid my 2nd to last payment today, so I have only one payment left on the old lease. I’m trying to walk this fine line of not inflating my DTI and also my old lease not closing at the wrong time and potentially causing my credit score to drop while I’m trying to apply for a new lease

Jeep Wrangler 4xE Sport S

Current numbers would be

36 months
15K miles

MSRP: $59,490

Selling price: $54,574

My calculations are $545 per month after 8.26% off of MSRP and $10,000 in incentives. Located in southeast of the US

Money factor is a whopping .00329 for tier 1 credit

Residual: 63%

That’s with no money down and only first month, dealer fee, and government fee due at signing. I planned to have taxes and acquisition fee rolled in otherwise my payment would have been lower per month.

5

You should be elegible for more incentives and the TDM $1k discount. Go to Jeep.com and get a certificate. There may also be some loyalty cash available.

6

No loyalty on sport s.

7

You’re overthinking this, the DTI thing is a non-issue, this isn’t a mortgage, there’s really nothing to worry about.

The bank can see that your current lease is ending and you only have 1 payment left (especially as it’s the same bank) and they take that into account with your DTI and credit decision.

There are lots of scenarios in the auto loan/lease world where folks may have a trade line show up on their credit report that should not be included in their DTI. A financed trade in or lease ending soon come to mind.

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8

The $10,000 in incentives already counts the $1000.

$7,500 PHEV, $1,500 national lease bonus, $1,000 Jeep.com tdm bonus cash.

9

Got it! I can chill out then. :joy:

This is actually my 2nd lease (and 2nd car ever), so I started reading about DTI and fell down a rabbit hole. I wasn’t sure how that was evaluated by banks, but what you are saying makes a lot of sense. Thanks!

10

Well that stinks. In the Mid-Atlantic we get an extra $2K in bonus .

11

It does stink ha! In the south east, it’s usually an incentive desert here. I was actually surprised they had the $1,500 available and that’s a national thing. We never get really good incentives. At least not for the Wrangler.

I know the Sahara and Rubicon have had more incentives, but with this being an order I didn’t want to take a chance just in case incentives dried up by the time my order delivered.

12

That’s really expensive for a base Wrangler 4xe

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