Q. I'm a first-time buyer. Can I increase the amount of the mortgage to pay off debt so that I will have a lower debt-to-income ratio at the time of the purchase?

A.When you get a mortgage, lenders will almost never allow you to borrow more than the house is worth. Indeed, it's much harder to get 100% financing right now. Most banks and mortgage companies are requiring at least a 5% down payment.

If you're buying a $200,000 home, you can't borrow $220,000, obtain a check for the extra $20,000 at closing and use that money to pay other bills.

That's because the house serves as collateral for the loan. If you default on the loan, the lenders would sell your house to recoup their loss. But if they had loaned you more than the house was worth, there would be no way to recover that extra amount.

Once you own the home for a few years and build up equity (the difference between what the house is worth and what you owe on it), you can borrow a percentage of your equity and use it to pay off other bills.

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.