Do lenders look at all our oustanding debts before they approve a home loan? Or is your credit score enough?

Answer 1

I am just in the middle of this, so I will answer: Maybe even more important than your credit score is your debt-to-income ratio. So yes, they will look at outstanding debts. They made me pay off my car before I could get the home loan.

Answer 2

I would guess that you haven't applied for a home loan before, so you don't quite understand what you are getting into. Depending on the lender and the state you live in, your credit will be closely examined and your current debt to income ratio studied. Legitimate lenders don't want to make loans to people who are going to default. They want to keep you paying back your loan with interest for a long time. The less scrupulous lenders don't care because they will take what payments you make and then take the home when you default. Credit scores are good, but they just tell lenders what you have done in the past. A lot of people who have good credit scores buy a house without realizing all the extra expenses like taxes, insurance and upkeep. They soon find they are in over their heads trying to keep up their credit card payments, car payments,etc, plus all the new expenses.
So it depends on who you are borrowing from. Home buying is a big step, so be sure you have a solid lender and don't buy more than you need.

Answer 3

Credit score is only one of many factors. The credit scores don't take into account your income, for instance. You can have a 750 credit score and make 1500 a month or you can a have a 700 score and make 10 grand a month. Your debt load or Debt to income is another important factor as others have already said.

Answer 4

they look at both. Actually they follow the 5 C's of credit: capacity (do you have the means to pay your payments), capital (your net worth), collateral (what you might be using to back the loan), cash flow (self explanatory), and character (how you handle credit obligations which is measured with a credit score). There is no single determinant, but usually if the credit scores are bad, getting the approval is pretty much a no-go!

Answer 5

Positive history is more important than your score. At least that is what I find. My little sister has a 700 score and 1 credit card, so she still can't get a car loan though because she only had it for 4 months.

Answer 6

What is the monthly $2491? Your income? Everyone can get approved for a mortgage. Just make sure you can afford your payments and everything else that comes along with being a homeowner. I have 2 friends who qualified right after bankruptcy. Just remember, you are doing the banks a favor by getting into this 30 year debt. You do it on your terms.

Answer 7

Yes, they always (at least the reputable ones) look at outstanding debt. They need to be sure you can afford the property.

What if you had monthly income of $10,000, your outstanding debt was costing you $8000 per month, and the loan would cost you $2500 per month. Duh, you can't afford it (you aren't even close - with more costs for food, utilities, etc - you will be bankrupt very soon) and they don't want to take back the mortgage 6 months later in foreclosure.

Answer 8

Depends on the lender. From my experience, they do look at the credit report very carefully, especially if you are after a good deal.

Answer 9

If it's a reputable mortgage company, they will look at your assets, credit score, debts, income, work history...... if you are not required to provide more than a signature for a credit report, I'd be careful borrowing from them........

Answer 10

If you plan to pay back the money , you can ask for a loan at Prosper. More information at http://www.acreditlibrary.com/prosper.html . You can also try your luck at online charities, people may send donations. More information at http://www.laodn.org/