HOW DOES MY AUTO LOAN AFFECT MY MORTGAGE QUALIFICATION?
Auto loans are usually easy to qualify for but can have serious repercussions when you apply for a mortgage. It’s not uncommon to see 7-year auto loans. These loans show up on your credit bureau.
Debts outside of your property need to be considered when applying for a mortgage. These debts include credit cards, auto loans, student loans, unsecured lines of credit etc.
MORTGAGE MATH: As of April 5th, 2018, your maximum mortgage qualification is reduced by $100,000 for every $400/month you have in debt repayments.
For example. Jon Snow qualifies for a mortgage of $450,000 with no debts. He decides he needs a new car to go to King’s Landing and agrees to a monthly payment of $400/month. After taking his auto loan, Jon Snow now qualifies for a mortgage of $350,000.