Buying a car loan will not affect your mortgage application. Car loans and mortgage loans are two different types of loans. Regardless of which comes first, buying a house or buying a car will not affect each other from a policy perspective. What will affect the mortgage loan is the borrower's debt service ratio. The debt service ratio refers to the ratio of personal monthly expenditures on various debts to monthly income. Banks will measure the borrower's repayment ability based on the debt service ratio before deciding how much to loan. And whether to provide loans to them. Generally speaking, when the debt service ratio exceeds 50%, banks will no longer grant loans.
Therefore, if the borrower has a car loan that has not yet been paid off, affected by the debt service rate, the amount of housing loan that the borrower can borrow will be reduced accordingly if the income remains unchanged, which will cause The down payment required in the early stage will be increased accordingly.
Factors affecting mortgage application
1. Personal credit record.
When applying for a home purchase loan, the bank will first check the borrower's personal credit report. If the report shows that the borrower has made three consecutive or six cumulative overdue repayments in the past two years, then the borrower's home purchase loan will be Loan applications will most likely be rejected. Therefore, everyone must maintain their personal credit in daily life and pay off credit card borrowings in a timely manner.
In addition to overdue records, if there are records of being sued for bad credit, bad records due to long-term arrears of water and electricity fees, etc., these may affect loan approval. Therefore, the utility bills at home must be paid in time to avoid being rejected when applying for a mortgage.
2. Repayment ability.
When it comes to repayment ability, in addition to personal credit record, banks will also focus on reviewing the borrower's repayment ability. If the debt is too large, or the income or job is unstable, it will affect the approval of the mortgage. In mortgage loan approval, occupations with higher ratings are civil servants, teachers, doctors, lawyers, and certified public accountants. Industries with strong competitive advantages are also popular, such as the financial power supply industry. At the same time, it is easier for people with higher academic qualifications to apply for bank mortgages.
In addition, applicants are also required to be between 18 and 65 years old, with 25-40 years old being the most popular group, followed by those aged 18-25 and 40-50, and 50-65 Housing loan applications for people under the age of 16 are generally not approved. Repayment ability includes four categories: annual household income, household net income, household financial assets, and other assets. High-quality customers considered by banks include: annual household income > 200,000, household financial assets > 500,000, household net income > 100,000, and other assets > 500,000.
3. Down payment.
According to bank requirements, customers applying for a mortgage need to have a certain proportion of down payment. Generally, the down payment ratio for a first home loan is not less than 30%, and the down payment ratio for a second home loan is not less than 60% (some cities require not less than 70%). Therefore, customers applying for a mortgage must prepare sufficient down payment. Generally speaking, the larger the down payment a borrower gives, the easier it is to get approved for a loan.
In addition, in order to obtain a loan quickly, borrowers should consult with the lending bank about "what procedures are required for a mortgage" before applying for a mortgage, so as to be prepared in advance.
4. The debt is too high.
In addition to personal credit affecting mortgage approval, the debt borne by the borrower will also affect loan approval. For example, the monthly credit card repayment amount exceeds 50% of the monthly income, or the existing car loan and house loan repayment amount exceeds 50% of the monthly income, etc.
Therefore, before applying for a home loan, the borrower must first confirm the factors that affect the approval of the home loan, so that when applying for a loan, they can try to avoid problems that will affect the loan application.