Applying for another loan apart from an existing car lease can hinder anyone from acquiring the home of their dreams. But if you are determined to apply for a mortgage, check your chances as Realtor discusses the possible options you can do to fulfill the loan for your dream home.
1. Identify your Debt to Income Ratio
This is a simple way of finding out if you have the capacity to buy a new home. Compute all your expenses which includes "including credit cards, student loans, personal loans, car debts, and other mortgages." Clearly, if you see that your income only goes to your monthly dues every month then you don't have the financial built to buy a new home.
The outlet suggests, "Well, the concept is, but if more than 25% of your income is already going toward debts, you may not be able to buy as much home as you think. When you have other existing obligations, your ability to borrow can be reduced tremendously. That $300 per month car lease, for example, can be severely hampering your buying power."
2. Smart Options to Rid off the Lease
There are ways on how you can get rid off the lease and have better options that could go well with your credit score and mortgage loan. First thing you can do is to "talk with your car dealer," tell your concerns and seek help on how you can permanently pay off your lease due and get out of it completely.
Other options are letting another person take your lease or you can also resort in paying out the whole balance of your car lease. If you chose to transfer your lease to another person, just be sure that you cleared this process accordingly and that you don't have future obligations with the lease.
3. Clearing out to apply for a mortgage
Proper documentation is important especially if you are paying off your debt. Your payments to the bank must "produce a paper trail showing money leaving your bank account and going to the creditor to pay off debt or provide a copy of the canceled check to show you no longer owe the obligation."
