One of the more important things lenders are required to do is to determine affordability. This is done with just a little math magic by taking your minimum monthly payments that appear on your credit report by your gross monthly income. The result is a percentage, or as lenders refer to the result, a ratio. This is your debt ratio and most every loan program requires lenders to determine affordability and this is how it’s accomplished.

There are two ratios, one that compares your mortgage payment (including property taxes, insurance and mortgage insurance when needed) and  your income and then all your debts and your income. Generally speaking, lenders like to see the housing ratio be around one-third of your gross monthly income and your total debt ratio somewhere around 38-41. Again, different lenders and loan programs can have maximum scores but in general this gives you a pretty good idea.

The housing ratio is pretty easy to figure. The lender calculates what your future principal and interest payment will be added to the property taxes for the home along with the insurance quote from your insurance agent. The second ratio, the total ratio, takes the housing ratio and then adds the minimum monthly payments that appear on your credit report.  Sometimes though, the minimum monthly payment information is missing. The account along with the account balance is there, but the minimum payment required has been ghosted. Lenders have to have this information before approving your loan.

Lenders can, on their own, make an estimate of the minimum amount required but this is rare.
They want the real stuff. Why is this important information missing? It’s quite possible the lender simply doesn’t report payment to the credit agencies. They’re really not required to. They only report information to the bureaus to which they subscribe. A lender, seeing such a situation could also assume the balance showing on the report is a balloon payment that’s coming due. What’s a balloon? It means that at some point in the future, the entire balance will be due all at once. Obviously, this will destroy someone’s debt ratios.

Instead, you can contact the creditor directly and tell them what you’re looking for. You need not just the account and payment history but also the minimum due. The creditor can then provide the information directly to you while at the same time updating the account appearing on your report. Your lender may also want to verify this information but the payment info isn’t showing up, you’ll need to take these steps so your lender can move forward with your approval.