If you’re thinking about buying your first home, you might be wondering if using Klarna or other ‘buy now, pay later’ (BNPL) services could cause issues with getting a mortgage.
Spreading out payments can be super helpful, but it’s worth knowing how lenders might see it.
Will Klarna Stop You from Getting a Mortgage?
Not necessarily! But it can play a role in how lenders assess your application. Here’s how BNPL services like Klarna, PayPal Credit, Laybuy, and Clearpay might come into play:
- Debt-to-Income Ratio (DTI): If Klarna payments are adding to your monthly outgoings, it could push up your DTI, making it harder to borrow as much as you’d like.
- Extra Scrutiny: Some lenders see Klarna use as a red flag, thinking it might mean you rely on credit for everyday spending. It’s not a dealbreaker, but they might ask more questions.
- Affordability Checks: Ongoing Klarna payments could be seen as fixed expenses, which might lower the amount you can borrow.
- Missed Payments: The biggest issue? Missed Klarna payments. These will show up on your credit report and make lenders think twice about offering you a mortgage.
When Klarna Won’t Be a Problem
Using Klarna doesn’t automatically mean you’ll be turned down for a mortgage. Lenders might not be too concerned if:
- You only used Klarna once and paid it off in full.
- The amount you borrowed is small.
- You’ve never missed a payment.
- You’ll clear the debt before getting your mortgage.
Some lenders are stricter than others, but there are plenty who will look at the bigger picture rather than just your Klarna usage.
Can Klarna Actually Help Your Mortgage Application?
In some cases, yes! If you’ve got little to no credit history, using Klarna responsibly—by making payments on time—could help build your credit score. But keep in mind, some lenders don’t like seeing BNPL use at all, so it’s a bit of a balancing act.
What Should You Do If You’re Worried About Klarna and Your Mortgage?
If you’re feeling unsure about whether Klarna will impact your mortgage application, don’t stress—just have a chat with us at Oak Mortgages. We’ll take a look at your situation, let you know what lenders might think, and help you find the best mortgage options for you.
Final Thoughts
Using Klarna isn’t the end of the world when it comes to getting a mortgage, but it’s something to be mindful of. Keep an eye on your payments, avoid missing any, and if you’re unsure, reach out to Clever Mortgages—we’re here to help make your home-buying journey as smooth as possible!
