Do You Need to Be Debt Free to Get a Mortgage?
Shortly, no, you do not need to be debt free to get a mortgage. However, the amount of debt you owe can significantly impact your chances of becoming approved for a mortgage and the amount of money you will be allowed to borrow. Lenders perform in-depth checks of applicants’ financial history and credit score to determine home loan and mortgage eligibility, and debt can indicate a risky home loan agreement for a lender.
It is highly recommended to pay off as much personal debt as you can before applying for a mortgage for the best chances of approval. The credit checks lenders perform on applicants can also negatively impact your credit score, so you will want to wait for a score increase before applying for pre-approval. Decreasing high credit limits, closing unused credit cards, eliminating high-interest-rate debt, and paying your monthly bills in full and on time are just a few ways to boost your credit score and increase your personal borrowing capacity.
Properly researching the lenders and loan types available is the best way to verify you are getting the best deal possible with good rates and low interest. Mortgage House lending specialists have the necessary tools to assist potential homebuyers through the home buying process by comparing loans and rates, offering specialized financial advice, and mortgage repayment plans. Reach out to us today for more information, and check out our Best Rate Mortgage Calculator to easily evaluate the mortgage options available to you.