Excellent Credit And Good Credit Partnerships

Finding the Best Mortgages with Higher Debt Ratios but Excellent Credit

Are you financially ready for a mortgage? You may have acquired an excellent credit rating, but how healthy is your debt ratio? Your debt ratio is the percentage of your monthly income that goes directly to paying bills. If a good chunk of your paycheck goes to car, cell phone, rent, utilities and student loan or personal loan payments then you probably have a high debt ratio. And when shopping for the best mortgages with higher debt ratios excellent credit will not automatically get you the deal you want.

Lenders are definitely interested in your credit history when considering you for a mortgage loan. Lenders want to see a history of your credit worthiness. And regardless of how many bills you pay each month, if you are managing to keep your head above water and pay every bill when it is due then there’s a good chance you have a very good to excellent credit score.

But for the best mortgage rates with higher debt ratios excellent credit will only take you so far. Lenders are also going to look at your income and your debt ratio to consider the likelihood of you being able to make your mortgage payments. You will have less bargaining power and will be offered fewer perks and bonuses with a mortgage if you have a high debt ratio.

Experts recommend that you keep your debt ratio lower than 30 percent. The easiest way to cut your debt ratio is to consolidate your bills. Debt consolidation can allow you to combine all of your bills into one lower monthly payment. Because considering even the best mortgages with higher debt ratios excellent credit will still not get you the best deal out there. Take the time to bring your debt ratio down and you can negotiate a mortgage that will not leave you house poor, or even worse, with the threat of foreclosure.