Hi, my husband and I are going to purchase our first home the end of summer 2007. We have been to first time home buyer classes and are getting counselling. We know that it is a very bad idea to purchase a vehicle right before applying for a mortgage, however, my vehicle is on its way out (it was a poor choice from the start) and I've only had it for a year. We were wondering if it would be "bad" for us to go ahead and trade it in for a different vehicle costing the same or less. Is it going to hurt our chances when it comes time for a mortgage? Some background that might be helpful, my boyfriend makes well above the median income around here, and at the moment I'm not even working so without my paycheck we already make $73,000.00/year. Once I get a job, we will be well over $100,000.00 Houses are cheap here, about $190,000.00 for the ones we are looking at. He has pretty good credit, I believe his score is in the high 600's or low 700's, but mine is still a little rough around the edges due to a previous marriage (6 years ago). I didn't file bankrupcy or anything, but I have a couple of chargeoffs (paid in full now) for a low amount (under $3000.00 total) that are hindering my credit making it at the low 600 range. However, we got pre-approved for a mortgage last year (but moved out of state instead) and we got approved for 2 car loans (the car I have now that doesn't run, and his "new", used car). So, should we hold off on trading my car in and take the chances on repair bills (it has a warrenty, but without a car, I can't go on job interviews) and wait until after the house, or should we go now and trade it in. And if we do trade it in, what are our chances of just using the same bank for the loan, and not having to go through the hassle of them pulling credit from a million different places like last time. Thanks any help is greatly appreciated.
These might seem odd to someone who's use ta being on their own, but I'm thinkin some things ya can do: 1. borrow money from a relative, and pay it back what ya could afford. 2. borrow a car from a relative. In your case, can you borrow it until your loan closes, and ya can get another car on yer own. 3. borrow money from a relative for da repairs, and when ya get straight, ya can get ya a car...and pay the relative back what ya can. 4. cross yer fingers, toes, and eyes, and hope yer car lasts 5. call the bank where ya gonna get the mortgage, and ask them the impact of getting a car loan before ya get a loan, and is there a cutoff amount of what's 'too much'. The place where I worked for was so greedy to do loans, that they looked the other way as long as the car/new loan was under 20,000, AND yer score was at least 680+. Wow they suck....hehe Anyhoo , I wish ya luck!
Thanks for the advice. We have the money, cash in the bank I mean. We don't have to borrow for repairs, and unfortunately we don't know a sole in this state. We just moved here 30 days ago. All of our family is 400 miles away. The car is more of a luxury thing than a necessity at this point. I don't want to cause a huge war in here or hurt any feelings but the truth of the matter is I bought a cheaper American vehicle instead of the Japanese car my husband told me to buy. In light of everything that has happened with this car in only 9 months, I'm now seeing why he wanted me to get the other vehicle. The car would cost the same amount and everything and all the terms would be the same, it would just be a better quality car. I would just feel safer knowing I wasn't going to get stranded like I almost did yesterday. My thinking though is that this would start my loan all over again, and I don't know how the other loan would look on my credit if I traded this car in. I mean I've never done that, I've just always paid my car off (usually early). Not to mention it would be more pulls on my credit report. I don't even know where we are going to get a mortgage because it is a year away. We haven't shopped for mortgages yet in this state. I guess we are just going to ride this vehicle out until we get the house. Once we get a mortgage though my credit score should go up right? I'm not in the least bit worried about income to debt ratio, trust me. We don't have one lick of debt besides our two vehicles which are each under $15,000.00 (we always buy used, never new) That is it, no credit cards, nothing. And our income is over $100,000.00 so I'm not worried about that. I was just concerned about the pulls on my credit report and how it would look getting another loan so soon after getting this one. I didn't have a problem getting this one at all though, and our interest rate is fair. I think I'm just going to wait it out and let hubby make the little repairs. Thanks again for the help!
I understand about the war...hehe And HA about the American vs Japanese car...hahah. I want a mustang or a Nissan.....so me too can sympathize with both of ya. After da mortage, your score will go up once the balance goes down, and ya start making payments. It usually takes a hit at first (mortgage showin up), and even though everyone's reports's different, and your balances continue to go down, the score usually stables afterwards, and slowly rises. Me wishes ya luck, and I hopes the car lasts
