Here is the simple breakdown:
Lenders use debt-to-income ratio to compare your monthly debts to your income.
That includes things like:
1 – Car payments.
2 – Student loans.
3 – Credit card minimum payments.
4 – Personal loans.
5 – Any other monthly debt showing on your credit.
So if you add a $700 car payment, that payment may reduce the mortgage payment you can qualify for.
The lender is not approving you based on what you plan to do someday.
They are reviewing what is documented right now.
Before opening a new loan, financing furniture, or changing your debt picture, talk to your mortgage team first.
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— If we haven’t met yet, I’m Richard Sarey, your go-to independent mortgage broker in Frisco Texas.
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