Financing A Home When You Have Debt
Are you trying to obtain a mortgage soon? What happens if you have a large amount of debt? Can you obtain a mortgage when you have debt? There are different loans and payment plans available to help people going through a difficult financial time. Lenders are placing importance on the income you have and the monthly payment you are capable of affording. The amount of debt you have causes problems as it does take away your income. Paying down your debt is the best way to ensure you can have an easier time obtaining a mortgage. Arizona mortgage brokers with the right experience can help you review your finances to determine what you can afford, and what is available for your current debt-to-income ratio.
What is Your Debt to Income Ratio?
Understanding how much money you have coming in and going out will help you understand what you can afford. If you have debt that exceeds 45% of your gross monthly income, you will have a harder time obtaining a mortgage. Lenders want to find borrowers that are bringing in healthy cash flow. What are the minimum payment obligations of each debt? Will the debt be reduced within a few months? If your debt to income ratio exceeds 2:1, your chances of obtaining a loan are slim-to-none.
Which Debts Do I Eliminate?
As you compare the different debts you are struggling to pay off, you need to determine which debts you can pay off quickly. Paying off credit cards, car loans, and student loans can free up extra money that can be put toward a home. Starting with the smaller debts that are easier to pay off is the best way to pay off debt quickly. If you want to obtain a loan within a few weeks, eliminating as many small debts as you possibly can is the best way to improve your financial outlook and convince a lender you deserve a loan.
Phoenix mortgage brokers can run scenarios to help you determine what debts you can pay off, and how much home you can afford. If you have $5,000 left on a car loan, try to pay it off as quickly as possible as it will free up the largest amount of money you are paying each month. An experienced mortgage broker can help you find the best financial solution. Money will need to be sourced and paper trailed if you want to pay off the money during the escrow process.
With the right mortgage broker on your side, you will be able to meet financial goals you need to achieve to obtain a mortgage. At Marquee Mortgage, we are committed to honesty, integrity and quality. No matter what your financial situation, we work to find you the best mortgage loan possible. Team up with a team of Arizona Mortgage brokers you can count on by contacting Marquee Mortgage today!