2007-10-01 01:25:01 · 8 answers · asked by anna63 1 in Business & Finance ➔ Personal Finance
No you don't however, any existing financial committments such as credit cards,car loans, personal loans etc will be deducted from your income and your mortgage lending will be based on your salary after these committments have been deducted.
2007-10-01 01:30:11 · answer #1 · answered by Anonymous · 0⤊ 0⤋
No, what is most important is proof of a good credit history. There several credit rating agencies, which maintain files on all of us, who have used credit in one form or another since our first transaction. They provide a rating to a potential lender about our credit worthiness.
Next is the current level of debt you carry, but only to ensure you will not be over your head in debt. This is usually considered in tandem with....
Your income level, net of ordinary household expenses. When the lendor determines what you are paying in monthly carrying costs plus your current monthly debt service, whatever is left over could be considered for a monthly mortgage amount. This is then fed into a financial formula (mortgage rate/balance/interest calculator) where it can determine the balance you can carry given it already has the monthly payment rate (amount) and interest charge.
If the amount you request is at or less than they determine, the mortgage will be granted. If it is over, they will reject your request insisting you come up with more equity.
NB Shop for a mortgage carefully, between the interest rates offered and fees there can be a swing of several thousand dollars.
2007-10-01 02:06:15 · answer #2 · answered by liorio1 4 · 0⤊ 0⤋
No, but many banks or institutions want you to keep your debt repayments (including mortgage) to not more than 40% of your total net income.
If your current debts are costing you 25% of your current income, then you won't have a lot of repayment power left for your mortgage.
Other things will influence the lender's decision too- for instance, you may have a higher than ideal debt to income ratio, but may have been able to put regular savings away each month as well as paying your debts to save your deposit - and that will all count as repayment ability.
2007-10-01 05:53:32 · answer #3 · answered by RM 6 · 0⤊ 0⤋
it helps if you are debt free but you dont have to be, you can be in as much debt as you want, you will always find someone to give you a mortgage, the interest may be higher but there is always a way.
I know a few people who live on the same street as me for years one is a couple who havnt worked for 20 years and live off benefits, they bought there house, it was going for about 150k at the time, my neighbour has no shame in telling me all the ins and outs of her problems and debts, she must owe over 10K yet she managed to buy hers, my parents have credit cards left right and center and i know they owe more than 20K cause alot of that is a loan to me but they bought thers no problem and my sister is the same, she has even had debt collectors on her door but she just bought her house last month.
on the other hand i hardly owe anything yet i have been trying to find someone to give us a mortgage for over 6 months now without any luck.
I think its hit and miss on finding a company who is willing to give you a chance and is in a good mood when you call.
2007-10-01 01:40:32 · answer #4 · answered by Anonymous · 0⤊ 0⤋
no not at all, many mortgage lenders will lend to people with current debts. I work for a independant mortgage broker so if you would like me to get you a quote feel free to get in touch.
2007-10-03 09:38:01 · answer #5 · answered by mia170107 2 · 0⤊ 1⤋
No its not neccessary. U can get mortgage while u have debts. Bec debts r for credit card and all other thinghs.And mortgage is totaly depend upon ur salary, ur credit rating and how much u pay for it and bla bla......................
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2007-10-01 01:36:48 · answer #6 · answered by passiarush 1 · 0⤊ 0⤋
These days if you want any form of debt / mortgages they will hand it over on a plate. My advice is look at your financial situation beforehand and decide for yourself if you can afford it.
2007-10-01 01:37:29 · answer #7 · answered by Anonymous · 0⤊ 0⤋
The answer is no but it is harder now than a few months ago,but its never advisable to get in over your head.You have no(credit rating) because you have no debts which is why they overlook you for a loan too.
2007-10-01 01:45:42 · answer #8 · answered by rolo 2 · 0⤊ 0⤋
Yes. (This does not apply if you have employees)
2007-10-01 11:58:06 · answer #9 · answered by Anonymous · 0⤊ 1⤋