Credit Card Debt
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Ghummaz Bhatti

How Can Credit Card Debt Affect My Mortgage Application?

When applying for a mortgage, your credit history is one of the most important factors lenders will consider. A history of high credit card debt could negatively affect your chances of being approved for a mortgage loan.

How Can Credit Card Debt Affect Your Mortgage Application?

Credit card debt can greatly impact your ability to get a mortgage. This is because when lenders review your application for a mortgage, they will look at your credit score and credit history. High credit card debt can affect your credit score and, consequently, your ability to qualify for a mortgage. 

When lenders review your credit score, they will also look at the amount of debt you have on your credit cards. If you have a high amount of debt on your credit cards, this could indicate to the lender that you are not a responsible borrower and might be more likely to default on the loan. Therefore, lenders may be less likely to approve your mortgage application if you have a large amount of credit card debt.

How Does a Credit Score Work?

To determine a credit score, lenders look at a person’s credit report. This report contains information about a person’s credit accounts, such as credit cards, loans, and other types of credit. It also includes information about late payments, outstanding balances, and other financial activities.

Lenders then use this information to calculate a credit score. Generally, the higher the score, the better the person’s creditworthiness. Scores typically range from 300 to 850, with higher scores indicating a better credit history.

How Does Debt-To-Income Ratio Work?

DTI is an important indicator of a person’s ability to pay back a loan, as it provides a snapshot of how large a portion of their income is going towards debt payments. So how does the debt-to-income ratio work? To calculate your DTI, you’ll need two pieces of information: your total monthly debt payments and your gross monthly income.

Your total monthly debt payments include any payments you make on credit cards, student loans, auto loans, and any other form of debt. Your gross monthly income is the amount you make before any taxes are taken out. Simply divide your total monthly debt payments by your gross monthly income, and you will get your DTI.

How to Deal with High Credit Card Debt?

While it may seem daunting to try to pay off such a large amount of debt, there are some steps you can take to make the process a little easier. Here are some tips on how to deal with high credit card debt:

1. Create a Budget

If you’re not already doing so, start by creating a budget. This will help you better handle your finances and figure out where you can cut back to free up some extra cash to put toward your credit card debt.

2. Cut Back on Expenses

Once you’ve created a budget, take a close look at your spending and see where you can cut back. Even small changes can make a big difference in paying down your debt.

3. Make More than the Minimum Payment

If you only make the minimum payment on your credit cards, it will take you much longer to pay off your debt. Try to make more than the minimum payment each month to get out of debt quicker.

4. Talk to a Financial Advisor

If you’re struggling to make ends meet or are unsure where to start when it comes to paying off your debt, talking to a financial advisor can be a big help. They can offer advice on how to budget, how to make extra payments, and what debt consolidation options may be right for you.


It is important to remember that carrying debt – especially credit card debt – can negatively impact your mortgage application. Lenders will consider your debt-to-income ratio when evaluating your application, and a high ratio can make it difficult to qualify for a loan. If you are concerned that your debt may impact your ability to get a mortgage, it may be helpful to speak with a financial advisor to get more information.

If you are seeking mortgage services in Ottawa, you can work with us at Ottawa Mortgage Services. We offer services for first-time home buyers, and we also offer assistance with refinancing, pre-approvals, and debt consolidation. Get in touch with us to learn more about what we can do for you.

Contact Ottawa Mortgage Services to learn more

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