Mortgage Glossary
Liabilities
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Liabilities are your outstanding debts and financial obligations, such as loans, credit cards, and alimony, that lenders weigh in qualifying.
What Liabilities means
Lenders total monthly liability payments to compute the debt-to-income ratio. Some obligations, like a paid-off-soon installment loan, may be excluded. Reducing liabilities before applying can improve qualifying.
Florida example
A buyer paid off a $9,000 car loan before applying, removing a $350 monthly liability and lowering the debt-to-income ratio enough to qualify for more.
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