Lenders will take into account your debt-to-income ratio (DTI) when assessing your application, which is a measure of how much debt you have relative to your income.
If you have a high DTI, it can indicate to lenders that you are overextending yourself financially, which can make them less likely to approve your mortgage application or offer you a lower loan amount.
Additionally, lenders will look at the amount of outstanding debt you have, including credit card balances, car loans, and student loans, as well as other monthly payments, such as rent or child support.
When assessing the debt, lenders will look at the minimum payments on the debt and will take into account the outstanding balance on the debt and the interest rate of the debt. They will also look at the length of time left to pay off the debt and the current interest rate on the debt.
A high level of debt can also lead to a higher interest rate on the mortgage, as it increases the risk for the lender.
It’s important to note that different lenders will have different lending policies and criteria when it comes to assessing debt, so it’s a good idea to speak to a mortgage broker who can compare offers from different lenders to find the most suitable mortgage for your situation.
At The Mortgage Branch, we are here to help you secure the most suitable mortgage for you, whatever your situation.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT
