Buying a New Car? Here’s How It Affects Your Mortgage Approval Odds

If you’re in the market for a new car and a new house, you might be wondering how a car loan will affect your mortgage approval odds. The answer isn’t simple, because there are many factors that come into play. But in general, buying a car can either help or hurt your chances of getting approved for a mortgage. In this blog post, we’ll take a closer look at how buying a car affects your mortgage application and offer some tips to help improve your chances of being approved.

If you’re in the process of applying for a mortgage, you’ve probably been given the advice to stay away from anything that could affect your debts, income or credit during that time. While that may be the ideal situation, it’s not always practical. For example, if you need to buy a new or used car, will that really change your mortgage application that much?

The answer is maybe. It all depends on how the new car loan will affect your debt-to-income ratio. If your new car payment is going to put you over the limit, then it could definitely have an impact on your mortgage application. However, if you can comfortably make the new car payment and still stay within the debt-to-income limit, then it probably won’t have much of an effect.

In general, it’s best to avoid taking on any new debts in the months leading up to your mortgage application. This includes auto loans, credit cards and any other type of loan. By doing this, you’ll minimize the risk of having your application denied or paying more for your mortgage than you otherwise would have.

If you’re already in the process of getting a mortgage, it’s important to refrain from making any major purchases until after your loan has closed. That includes buying a new car. Here’s why: your lender will take a fresh look at your debt-to-income ratio just before closing. If you add a new car payment to the mix, it could put you over the limit and jeopardize your loan approval. So even if you’ve been approved for a mortgage, resist the urge to buy a new car until after you close on your home. Trust us, it’ll be worth the wait.

Have additional questions? Send me an e-mail at If I can’t help you out directly, I’ll point you in the right direction so that financing your dream home is a breeze!

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