Wednesday, July 14th, 2010

How many months left on debt to not consider it when qualifying for a mortgage?

debt
Gladski asked:


I heard from a friend that if a car payment (or any debt for that matter) is below a certain amount of payments left, it is not considered a debt (for your debt/income ratio) when qualifying for a mortgage. Is this true? How many months left until it is not considered?

Thank you!

This entry was posted on Wednesday, July 14th, 2010 at 12:00 am and is filed under Debt Problems. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “How many months left on debt to not consider it when qualifying for a mortgage?”

Julia H Says:
July 15th, 2010 at 3:23 am

All debt is considered, however if your debt to credit ratio is below 30%, that is looked on more favorably when the bank pulls your credit report.

anabanana Says:
July 16th, 2010 at 5:29 am

You friend was probably talking about long term and short term debt. Long term is any debt that is going to be paid in more than 12 months, and shot term debt – within 6 months.

loankit.org Says:
July 18th, 2010 at 5:18 am

Yes, it is true. All Debt is a factor (car payments, credit cards, other types of loans). Debt also affects your credit and this can affect the Interest Rate you get on your mortgage. The amount of debt you have , because you will have less money available for a mortgage payment, will also affect the amount you are able to borrow. if you owe less then half of your balance on your car, you should not have any problems. Paul A -

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