Home Buying Advice - Impact of Buying a Car
How will buying a car impact your mortgage application
Impact of Buying a Car
When lenders calculate how much they will loan you, one of the calculations they use is the dept to imcome ratio. Basically the more dept you have the smaller the amount the lender will be willing to loan you. So if you buy a car, the car payments become a dept and your dept to income ratio increases and thus your maximum loan amount decreases.
Even if you think the car payments will not be a problem you should wait until after you have purchased your home before making any major purchases like a car.Return to Home Buying Advice