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We are having a difference of opinion regarding what income & debts should be used when calculating the ATR (debt-to-income) for the 61st month of the loan (or 5 years after the first pmt date). Some feel we are suppose to use the same income and debts used to calculate the debt-to-income at 61 months that is used up front. However, some want to eliminate any debt that may pay off in the first 5 years (ie: a car loan that will be paid off in 3 years) when calculating debt-to income at 61 months. They feel it is unfair to the borrower to use that payment when it is going to be paid off. I know in training Jack referred to not using a payment that might be eliminated within 6 months in the calculation (up front) but I don’t remember anything about eliminating a payment that might pay out in a longer period say 3 years. Can you help?
Thanks!
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