Do over funded IUL premiums count as debt for mortgage applicatio

[Craig Lessler]

For purposes of calculating a Debt to Income ratio for a Fannie or Freddie loan, does the premium paid each month on an over funded Life Insurance policy (IUL) count as debt?  Or do you only count the portion paid for the actual insurance and not count the over funded portion of each payment?

Also, if contribute to a large sum to a retirement plan, does that count against you in the calculation of the debt to income ratios when applying for a Fannie or Freddie loan?

[Jeff Dulla]

Hi Craig,

Neither of these should count against you when qualifying for a loan.

A life insurance premium, will not be included in your DTI. Although you have this as a monthly expense, similar to car insurance, or cell phone bills, items like that, that do not appear on your credit report (with some exceptions), will not be included.

If you are salaried employee, you should be able to qualify off of your gross monthly income.  The deduction of your retirement contribution should not come into play.