Home Buying in 06460>Question Details

jodym108, Home Buyer in Milford, CT

Is it possible to get pre-approved for a homeloan without revolving dept being included? The dept would be paid off when I sell my current residence.

Asked by jodym108, Milford, CT Thu Jan 24, 2013

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6
Dan Tabit’s answer
Jody,
When you apply, explain your plans to the loan officer. A pre-approval can be based on meeting criteria, such as paying off credit debt and/or present mortgage. You will need to show the lender a likely selling price for your home, not the optimistic one, and the balance of your mortgage(s).
So, yes it is possible and even common.
1 vote Thank Flag Link Thu Jan 24, 2013
Speaking directly to a mortgage professional is the best way to have your questions anwered regarding mortgage. There may be a way around this in that you can sell your property, pay your debts and then close on your new property, with paying off the debt as a condition of close. Unfortunately, you do not mention your credit; if your credit is not effected by the debt, then you could be fine, but it takes longer to repair credit.

Again, contact a mortgage professional. They know the ins and outs of the current laws and you are under no obligation to use them, even if you receive information from them. In otherwords, do not be afraid to call as an inquiry.
1 vote Thank Flag Link Thu Mar 7, 2013
Hi Christine, I think you have given jodym108 some excellent advice and I know for myself and my team that we are happy to answer any questions that come our way.

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Flag Fri Jul 26, 2013
Thank you! I have excellent credit, according to one agency, that I can view, I think paying off the debt would lower my debt to income thus raising my credit score. I'm concerned about my debt and getting pre-approved also if I would have to find another place to live after I sell my house to pay off my debt- or if I can make it a condition, as you say might be possible.
Flag Thu Mar 7, 2013
Talk to your Loan Officer, as you would be able to pay off or reduce your installment debt as a condition to getting a new home loan. Typically the loan officer can get a rapid credit score / report after you've paid off the debts to help you finalize your new home loan
1 vote Thank Flag Link Thu Jan 24, 2013
The loan approval is based on a ratio of your debt to income, FHA currently up to 55%, with conventional lenders preferring < 43%
0 votes Thank Flag Link Thu Jan 24, 2013
Jody, please let me know if you need any contact numbers for loan officers in the area or you can always try your own bank or credit union. Once you get prequalified, I would be more than happy to show you some houses :), Julie Lucia, Realtor, Showcase Realty, 203-578-5631; julie.lucia@att.net
0 votes Thank Flag Link Thu Jan 24, 2013
Installment debt is usually not counted against you if there is less than six months remaining. Revolving debt would most likely be counted, but as Dan mentioned below, you can ask the loan officer to give you a pre-approval based on the condition of that debt being paid off. Good luck Jody!
0 votes Thank Flag Link Thu Jan 24, 2013
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