Whether it’s from student loans, car payments or credit cards, most of us have debt in some form. This is often one of the top concerns for someone who is looking to buy a home. Many people wonder if this will affect their ability to buy a home.

Short answer: It depends.

Long answer: A person’s debt-to-income ratio (monthly debt divided by gross monthly income) is one of the big things a lender will look at during the pre-approval process. This ratio reveals how much of a borrower’s income is already accounted for by other debt. The number to remember here is 45% – e.g. 45% of a borrower’s gross monthly income can be used to cover consumer debt (mortgage, credit card, student loan, auto and other monthly payments). The 45% is a general guideline but each loan program has different tolerance levels regarding this ratio. Your loan officer will work with you on managing your debt if necessary to qualify for a home loan.