Can I exclude an installment debt like a car loan if I have less than 10 payments left?

Yes. This is a great question to ask your mortgage broker when looking for creative ways to improve your debt-to-income ratio in order to get approved for a mortgage.

More often than not, an installment loan (i.e. car loan or student loan) can be excluded during the approval process so long as you only have 10 payment or less to make. While some lenders have their own restrictions, most conventional and unconventional mortgage products allow you to exclude this debt. See below:

• Fannie Mae (Conventional): You can omit these debts on a case by case approval.
• Freddie Mac (Conventional): You can omit these debts on a case by case approval.
• FHA: You can omit these debts as long as the payment is less than 5% of your monthly income.
• USDA: Contact a mortgage expert for more info.
• VA: Contact a mortgage expert for more info.

To learn more about specific mortgage requirements, be sure to speak with an experience mortgage broker.