Not All Debt Counts Against You

 In First-Time Home Buyers

Everyone pays a lot of different bills every month, but not all of them affect your ability to qualify for a mortgage. In other words, not all debt counts against you. Here are some lists of which debts are considered when you apply for a mortgage, and which debts are ignored.

Here’s what does count (things that show on your credit report):

  • Existing home loans (first mortgages and home equity lines of credit – HELOCs)
  • Car loans and leases
  • Student loans
  • Credit cards
  • Unsecured personal loans or lines of credit (loans and lines of credit not backed by property you own)

These things also count, but do not necessarily show on your credit report:

  • Child support
  • Alimony and maintenance
  • Income tax payment plans

Here’s what doesn’t count (things that don’t show on your credit report):

  • Groceries
  • Utilities
  • Phone and Internet bills
  • Clothes
  • Entertainment expenses
  • Car expenses (gas, repairs, etc.)
  • Car insurance
  • Medical expenses
  • Loans you have taken against your 401(K) or IRA accounts

We can very easily determine whether a debt counts against you when applying for a mortgage.  Contact us today to get the most up-to-date information.


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