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Can you still buy a home with some debt?

Just curious. But we have one credit card to pay off that has kind of a high balance on it. That is our only debt though, no car payments, no student loans, stable jobs, and excellent credit. I wasn't sure if we had to be 100% debt free to be approved for a mortgage. I know nothing about buying a home because I've never done it before but I want to.

Answer Question
 
Anonymous

Asked by Anonymous at 7:13 PM on Feb. 20, 2011 in Money & Work

Answers (6)
  • Most people carry debt. It won't hurt you.
    jamesonjustines

    Answer by jamesonjustines at 7:16 PM on Feb. 20, 2011

  • You can because banks look at your debt to asset ratio. You need to own more then you owe. They also want to know how much the mortgage would increase your debt to asset ratio

    RyansMom001

    Answer by RyansMom001 at 7:16 PM on Feb. 20, 2011

  • Debt isn't a bad thing. So yes you can still buy a home with debt.
    admckenzie

    Answer by admckenzie at 7:17 PM on Feb. 20, 2011

  • We had some debt ( car payment and credit card) when we bought our house. I think they did a debt to income ratio, so if like 30 or more percent of your monthly income goes to debt they won't approve you or something like that. That was just an example I don't know what percent they use and I am sure different banks have different qualifications.

    lilysmom2607

    Answer by lilysmom2607 at 7:19 PM on Feb. 20, 2011

  • yes it is ok to have debt. As a mortgage processor I have seen lately that the lenders want people to have 3 different debts to show that they are capable of making a payment. Most lenders that I deal with like you to have a 29% debt ratio for your housing (this is your payment, taxes, insurance) and 41% for total debt including your new housing payment. This is based off of your gross income.
    Kari126

    Answer by Kari126 at 7:59 PM on Feb. 20, 2011

  • Read some of repsonses here.


    Good luck in making an important decision in buying a home.

    musicmom08

    Answer by musicmom08 at 5:34 PM on Feb. 21, 2011

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