Installment debt with less than 10 months remaining could be excluded from the DTI calculation.
Paying off installment and revolving debt to qualify IS allowed.
The maximum debt to income ratio on an FHA loan is determined by the Automated Underwriting System (AUS). The system takes into account the overall picture of your application including income stability, income source, amount down payment, cash reserves, credit scores, etc.
If you have credit scores above 640, the general rule of thumb is that your monthly obligations should not exceed 50% of your total qualifying budget.
Loans with lower credit scores will require lower DTI.
This overview is not all inclusive and does not include all guidelines or potential qualifying situations. Contact us or your lender for additional information that applies to your situation.