Car leasing always has direct affects to home mortgage qualification. This is because the loan amount allowed for any mortgage is depending on the borrower’s monthly income. If a huge part of the monthly income has gone to car leasing, the chances to get bigger loan amount is lesser.

So, how it really effects home mortgage qualification? There are basically five major things that will affect the loan application. These are:

Debt-to-income ratio. This is the basic calculation every borrower MUST KNOW. Debt-to-income ratio is a standard guideline to determine borrower’s ability to handle his or her current debt or any other debt added by the new mortgage. For example, if your monthly income is $3000, you have a car leasing loan of $1200 to pay monthly, chances to get the loan is lower. On the other hand, if the leasing is just $300 dollars, the debt-to-income ratio is lower and larger loan amount will be allowed.

Higher interest rate. You will still able to get any home mortgage although the debt-to-income ratio is high. However, be prepared to get a higher interested rate if the borrower debt-to-income ratio is very high.

Time frame or loan period. Loan period for car leasing is another thing that affects your qualification to apply for mortgage loan. If debt-to-income ratio is very high but the loan period is going to end, it usually will not affect the lender to give the borrower new credit at reasonable interest rate.

Debt Payments. If a borrower’s with monthly salary of $3000 and he is leasing a car with $1500 monthly payment. The borrower might not qualify for a new mortgage. What can the borrower do is either to refinance the leasing loan to lower monthly payment. For example, from $1500 to $800 dollars a month.

Tips to get a new home mortgage. It usually takes about 30 to 90 days for a mortgage loan approval. During this process, any spending on your credit card or any credit card installment will be taken into consideration for the loan approval. Therefore, you should avoid adding any debt during the process to get a new home mortgage. Understand how leasing a car affects qualifying for a home mortgage can definitely helps you to get a new home mortgage easily, especially for those who have high monthly payment for car leasing.