Will A Car Loan Prevent Me From Getting A Mortgage? Maybe…

The short answer to the question “Will A Car Loan Prevent Me From Getting A Mortgage?” is: maybe.

When the bank (and the Canadian Government) decide if you can afford a mortgage or not, they look at how much money you have at the end of the day when your bills are paid. Any loans that appear on your credit bureau (credit cards, personal loans, lines of credit, student loans, car payments) are all deducted from your employment income. The remainder is what is available to pay for your mortgage, property taxes and heat.

Why Maybe?

If you have enough income to sustain the mortgage payments AND carry all of your debts (including car payments) then the answer to the question “will a car loan prevent me from getting a mortgage” is: no.

What Are Some Other Factors?

The main factors that affect your ability to qualify for a mortgage are: income, credit and down payment. If you are trying to qualify for the maximum mortgage and you are wondering will a car loan prevent me from getting a mortgage, and you already have good credit and down payment, the less debt you have, the more you will qualify for.

Too many times in our office, our clients are disappointed that they can’t afford as much as they thought because there is a car loan on their credit bureau. It is particularly devastating when they are preapproved for a certain amount and they get the car loan just before they buy a house.

Hint: get the house. Move in. Establish yourself. Then the decision whether or not you can afford another payment will be YOUR decision, not the bank’s. 🙂

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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