With a decrease in car loans open the credit limit if I apply for a mortgage?

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Say I’m a year after a car loan for five years. Are stocks hurt me for the level I want to borrow for a mortgage?

5 Comments
  1. Reply
    Erica
    January 24, 2011 at 12:35 am

    no, it usually helps to have some type of something on your credit so they can see how you do on your payments.Sounds funny but its eaiser to get a home loan then it is to get a car loan…one major reason…the house stays put…its hard to hide a house if you go in default with the bank. Good Luck =D

  2. Reply
    Judy
    January 24, 2011 at 1:28 am

    It will not hurt you.

    The only way is:
    It will lower the monthly mortgage amount you will qualify for.
    Makes sense right?
    The more debts you have – the less house you will qualify for.

    Do you have any credit cards? – pay them in full each month – do not carry balances.
    Check your credit reports once a year for free at
    Annual Credit Report.com
    This is the only federally approved site to get your reports.
    If they are in perfect condition get your score from myfico.com for about 15 bucks.
    /

  3. Reply
    Caveat Emptor
    January 24, 2011 at 2:18 am

    You other debt is always considered when applying for a new loan, so it can have some effect.

  4. Reply
    timothy p
    January 24, 2011 at 2:20 am

    Yes. It is calculated in your debt to income ratio. It may help your credit score but it will absolutely decrease the total amount you can borrow. Most lenders put a total cap around 30-35%.

    ex… Your bank sets the max DTI at 30%. You make 5k per month. That leaves you $ 1500/month for your total debt allowance. You have a $ 500/month car payment. You have a $ 200/month student loan. These 2 loans total $ 700. This will leave $ 800 per month for your home loan. Some banks count insurance, credit cards… but you get the idea

  5. Reply
    Mokan Autos
    January 24, 2011 at 3:17 am

    I think not, my sister in law had a car loan and just recently decided to have there own home and she got it with no ease at all.

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