How Does My Auto Loan Affect My Qualification?
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.