Are life insurance premiums included in debt to income ratio? (loan, loan)

[GPC]

We're thinking of increasing our life insurance policies which, of course, will increase our life insurance monthly payments. It's not an issue yet as we currently own our house outright, however, we plan to buy a more expensive house in a couple of years and will be taking out a mortgage (planning on putting approximately $600K down and getting a mortgage for approximately $250K). Will our life insurance monthly payments be factored into our debt for the debt to income ratio?

[mathjak107]

you need to ask the lender

[adjusterjack]

Will our life insurance monthly payments be factored into our debt for the debt to income ratio?

It's not a debt, but it is an expense.

The Fannie Mae loan application (for example) section 2d asks for Other Liabilities and Expenses.

https://singlefamily.fanniemae.com/media/7896/display

My guess is that it will somehow be factored into your ability to make the mortgage payment.

When you apply for a mortgage you'll find out more about it.

[GPC]

Originally Posted by mathjak107

you need to ask the lender

Thanks for your response.

[GPC]

Originally Posted by adjusterjack

It's not a debt, but it is an expense.

The Fannie Mae loan application (for example) section 2d asks for Other Liabilities and Expenses.

https://singlefamily.fanniemae.com/media/7896/display

My guess is that it will somehow be factored into your ability to make the mortgage payment.

When you apply for a mortgage you'll find out more about it.

Thanks for your response.

[MikeJaquish]

Originally Posted by GPC

We're thinking of increasing our life insurance policies which, of course, will increase our life insurance monthly payments. It's not an issue yet as we currently own our house outright, however, we plan to buy a more expensive house in a couple of years and will be taking out a mortgage (planning on putting approximately $600K down and getting a mortgage for approximately $250K). Will our life insurance monthly payments be factored into our debt for the debt to income ratio?

Term Life Insurance policy or Whole Life Insurance?

[adjusterjack]

Originally Posted by MikeJaquish

Term Life Insurance policy or Whole Life Insurance?

They are both an expense against income.

However, lenders "might" consider the cash value (to some extent) of whole life insurance as an asset against liabilities.

No guarantee. Depends on the lender.

[TimtheGuy]

Originally Posted by GPC

We're thinking of increasing our life insurance policies which, of course, will increase our life insurance monthly payments. It's not an issue yet as we currently own our house outright, however, we plan to buy a more expensive house in a couple of years and will be taking out a mortgage (planning on putting approximately $600K down and getting a mortgage for approximately $250K). Will our life insurance monthly payments be factored into our debt for the debt to income ratio?

No, life insurance premiums will not be included in any DTI calculations for mortgage qualifying. There are not a debt and you could opt to quit paying those premiums at any time. Put another way, those premiums are not an obligation.
Signed,
20 year mortgage guy

[GPC]

Originally Posted by MikeJaquish

Term Life Insurance policy or Whole Life Insurance?

Term life insurance

[GPC]

Originally Posted by TimtheGuy

No, life insurance premiums will not be included in any DTI calculations for mortgage qualifying. There are not a debt and you could opt to quit paying those premiums at any time. Put another way, those premiums are not an obligation.
Signed,
20 year mortgage guy

Thanks for your response.