Millions of people are affected by debt, but can you get a mortgage if you owe money to other people or institutions? The short answer is yes, you technically can get a mortgage while in debt. It largely depends on the type of debt you’re in and how much you owe, but it’s entirely possible to get your hands on a home loan and jump on the property ladder.
Whether or not you should get a mortgage while in debt is another question entirely. We’ll touch on this towards the end of the post, but first, what do you need to know about applying for mortgages while in debt?
When will lenders approve a mortgage application if you’re in debt?
Lenders will approve your mortgage application if your debt isn’t too big or it doesn’t have a significant impact on your financial situation.
For example, you’re paying off your student loan. That’s a type of debt, but if you’re still able to pay your bills and have enough money to cover mortgage repayments, the lender won’t see much of an issue.
It’s a similar story if you have another personal loan; as long as it isn’t affecting your credit score too badly, the lender will turn a blind eye. Working with a mortgage broker is often advised when you’re in debt as they’ll have access to lenders who look favourably on people with existing debts. Not only can they help you find reputable mortgage lenders, but they also may help
