Getting a mortgage with bad credit is difficult, but getting one with a lot of debt makes it even more difficult. This is because your financial history and credit score are the two main factors lenders consider when determining whether your mortgage application should be approved.
Having a lot of debt shows that you cannot afford more loans or a mortgage.
If you are considering getting a mortgage with a lot of debt, you should think about it cautiously because the lender will not be interested in lending a mortgage to someone unable to afford it. A non-profitable mortgage is all in vain, and you lose your security, making it worse.
Can I get a mortgage with lots of debt?
To be more specific, the answer is yes. This is because it would be unreasonable for lenders to expect all of their applicants to be debt-free before agreeing to approve their mortgage application. According to the current financial standards and requirements, very few individuals could climb the property ladder if they had to be debt-free before seeking a mortgage.
Fortunately, lenders don’t consider the basic framework of debt since they understand that individuals have a variety of personal debt from the past, such as educational loans, vehicle loans, credit card debt, and other commitments.
Furthermore, if you can prove to them that you are effectively managing the previous repayments, are doing well enough financially, and have a space in your cash flow for another debt mortgage on top of those earlier loans without any potential risk, your chances of getting a mortgage approved will be higher.
As a general guideline, if your debt-to-income ratio is less than 20%, you will encounter fewer hurdles and possibly get a more favourable offer than if it is 50%. We at MortgageKey can assist you in examining your particular circumstances in further detail and providing you with the best possible advice.