Is It Possible to Get a House Mortgage if I Have a Lot of Debt?

It is no secret that being in debt is no longer uncommon in today’s world.

With ever increasing expenses catering to our needs and desires, even a person with a respectable income becomes debt laden.

A desire which many harbor, is to own a home and consequently, a question arises in their minds – “Is It Possible to Get a House Mortgage if I Have a Lot of Debt?”

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First, Ask Yourself if You Really Need a House Mortgage

Debts have long been classified into Good Debts and Bad Debts.

But even a Good Debt like having a student loan can be a hindrance for another Good Debt like getting a House Mortgage.

A loan is an obligation afterall and having existing credit card loans, student loans and so on can force a creditor to strike you off your possibility of getting a House Mortgage.

Our borrowing habits affect our credit scores which in turn, affects our chances of getting a mortgage.

If you wish to be the proud owner of your own house someday, and if you happen to find yourself entertaining doubt with regards to whether you will indeed be able to get a House Mortgage because of your existing debts – you should probably reconsider.

More often than not, being in debt translates to your inability of budgeting and spending according to your income.

If you are already entangled in the vicious cycle of debt and don’t have a reliable Debt PayOff Plan, perhaps you’re better off without a house mortgage.

Ways in Which You Can Secure a Mortgage Despite Being in Debt

A house mortgage comes with a lower rate of interest and is generally a recommended investment because it turns into an asset over time, after you’ve repaid your loans.

So, if you still wish to proceed with a house mortgage, here are a handful of things to keep in mind –

  • Your ability to re-pay with interest – Find out whether the rate of interest is fixed or adjustable. Then assess whether you will be able to make necessary payments in the future. A rule of thumb which propels your possibility of landing a mortgage of any sort, is your first payment against the first mortgage you receive. It should ideally be more than 31% of your gross income. Your mortgage lender, will then, overview how you are able to manage your debts so you avoid foreclosure or chances of defaulting in the future.
  • Maintain a good credit score – Keep a close watch on your credit score. A high credit score and good credit record is of paramount importance. Ensure timely repayment of credit and avoid late settlements to improve your chances of acquiring that house mortgage.
  • Have a good DTI- Often, the first thing lenders look at before considering giving out a house mortgage is the applicant’s DTI (Debt-to-income) ratio. There are two ways for you to make this ratio look healthy. One, is to pay off some debts and reduce your financial burden. The second, is to find ways to increase your income.


Source –

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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