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A person holding a tablet playing a video featuring well qualified buyers

Am I A Qualified Buyer?

You’re watching TV when an ad for your dream vehicle comes on and announces a great offer “for well-qualified buyers.” But what does that mean? Let’s take a deeper look at the factors that are considered on these types of lending decisions.           

What’s a well-qualified buyer?

Simply put, a well-qualified buyer is a person who meets a lender’s expectations for specific offers. Typically, lenders consider the following categories when determining qualifications:

  • Credit score: Although scoring models from credit bureaus, financing companies and FICO® will vary, this will generally include excellent credit ratings; commonly referred to as prime, but can also include super prime ratings.
  • Debt to income (DTI) ratio: Lenders are looking for a well-balanced DTI. To calculate, divide your monthly debt payments by your gross monthly income. You’ll want this number to be around 50%, but each creditor looks at this on a case-by-case basis.
  • Payment to income (PTI) ratio: This is a calculation that shows lenders how much of your monthly income is used to pay down debt. A ratio that’s less than 20% of your income is typically favorable. Lenders may factor in other variables, but it’s good practice to keep this number low.

This is just a quick look at what can contribute to being considered a well-qualified buyer. Hopefully, you now have a better understanding of what that means, and how close you are to getting into your dream vehicle. Whether you think you check all the boxes or just a few, your dealer can work with you to find a financing solution with GM Financial based on your qualifications.

If you want to find out what current offers you’re eligible for, getting prequalified is a great way to start. Or, if you’re looking for online resources to improve your financial know-how, we’ve got you covered.

 

 
Eric Jordan
By Eric Jordan, GM Financial

Eric Jordan is passionate about helping others strengthen their financial savvy. He also spends a lot of time strengthening his dad skills as a father of three boys (soon to be four). It’s not uncommon to find Eric rearranging car seats in his Yukon XL, or playing “the bad guy” to the kiddos “superheroes.”

 

Ready to get in the driver's seat?

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