If you’ve been following the headlines lately, you may have seen reporting on how $800 monthly car payments are straining budgets and slowing auto sales. It’s a compelling story about the car industry. But from where I sit, there’s another story hiding in those numbers — one that affects far more people and almost never gets told.
That $800 car payment isn’t just hurting your ability to buy a car. It’s quietly taking a massive chunk out of what you can qualify for when you’re ready to buy a home.
Quick answer: At today’s common 6% rate on a 30-year fixed mortgage, every $100 in monthly car payment reduces your home buying power by approximately $16,679. An $800 car payment alone eliminates $133,432 in mortgage qualifying amount — before a lender even looks at the rest of your file.
When Congress resolved the latest debt ceiling with the passing of The Financial Responsibility Act of 2023, both parties agreed to stop the forbearance on student loans payments. Federally backed student loan payments have been paused for the past three years due to the pandemic. Payments on student loans are set to resume following this September and many are not going to be prepared for this. 
If you are looking at adding to your real estate investment portfolio, I may have some good news for you! We have a 
It used to be that people would say that you can qualify to buy a home three times your annual salary…this is actually not really the case. When qualifying to buy a home (i.e. get a mortgage) lenders consider your income, monthly debts and the amount of funds you have for down payment and closing cost. 
