Gross Debt vs Total Debt Ratios for car lease/finance

[redbeast]

When you apply for a lease/finance for a car what do they usually check? Is it the Gross Debt Service Ratio (GDS) or Total Debt Service Ratio (TDS)?

I can't remember the percentage that is allowable for one to qualify. Last time I thought it was no more than 40%.

Can someone confirm please?
Thanks.

[TYMSMNY]

IDeally TDS should not be higher than 40% and the GDS not over 32%. Of course these are just standard rates and other guidlines may be used such as credit history.

I believe they look at both but maybe someone who works at a dealership can confirm that. Ryan @ Lexus?

[Fiddy Yen]

I think for most banks TDSR is more important on a loan than GDS. But when looking at applying for a mortgage the combination of GDS and TDSR are looked at.

[Ven]

S40 for Nini!

[Redlyne_mr2]

TDSR is what is looked at... 40-55% for conservative lenders, 55-70 for the more liberal ones. Do you have any concerns? Cash down can usually solve TDSR issues.

[redbeast]

Hey Ven!

Hahaha no its not for Nini! I'll explain when I talk to you next.

[redbeast]

No concerns, I have good credit. Just that mortgage is under my name so I know they look at your overall monthly payments divided my gross monthly income.

[Redlyne_mr2]

The mortgage will help you more than hurt you. They will more than likely look past that. It's outstanding loans and credit cards that will hurt.

[Fiddy Yen]

Originally posted by Redlyne_mr2
TDSR is what is looked at... 40-55% for conservative lenders, 55-70 for the more liberal ones. Do you have any concerns? Cash down can usually solve TDSR issues.

55%????

[canadian_hustla]

They look at TDS

They do not care about GDS. GDS is used with home financing.

VERY rare to have a lender lend 55% TDS. Threshold is usually 40%~ give or take a few.

If you own a house they will count your monthly property taxes/and or condo fees. Most banks do not take it account your heating expenses.

[Redlyne_mr2]

Originally posted by canadian_hustla
They look at TDS

They do not care about GDS. GDS is used with home financing.

VERY rare to have a lender lend 55% TDS. Threshold is usually 40%~ give or take a few.

If you own a house they will count your monthly property taxes/and or condo fees. Most banks do not take it account your heating expenses.

Captive automotive finance companies are much more lineant. If were talking banks then that's a whole different ball game.

[canadian_hustla]

Originally posted by Redlyne_mr2

Captive automotive finance companies are much more lineant. If were talking banks then that's a whole different ball game.

oops sorry i should have read the OP's post