AAAAGGGGHHHH!! Van just died - never did an auto loan before - help!

[Anonymous]

Hi folks - I actually have been reading the mortgage boards lately, but found out today that our minivan's transmission is totalled.  We have 4 kids, so we need a new (used) one.  My husband would be applying on his own for a loan since I don't have income and have worse credit than him anyway - his mid FICO score is 688.  Hoping to get advice on the best place to get a loan with this score (dealership, online, credit union?).  Oh, also, he has been working at his current job since September, but was working in the same industry for 2 years prior (switched companies for a pay raise).  Very little other debt - a Capitol One mastercard with a $500 limit and only around $100 a month charged on it (pays off in full every month).  We're not looking for anything fancy - just another reliable minivan to get the kids around.  

Thanks for any help!

[Anonymous]

I doubt you will have a problem, bring some money down, I would expect a dealership to be anble to do you and do you well, unless you have a CU you work with.

[Varakai]

assuming your current van is paid off and doesn't have any other major issues, why not just have the tranny repaired? While the repair may be more than your monthly payment on another van, you will be better off in the end as in cheaper and no debt...

[llecs]

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@Anonymous wrote:

Hi folks - I actually have been reading the mortgage boards lately.......

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If you are in the hunt for a mortgage, then mentally rank the importance. In some situations, a new car loan can knock you out of contention for a mortgage; the new car payment could put you out of contention for a mortgage due to the increase in DTI.

If your credit is borderline for a mortgage, then you could likely see a drop in FICO when the new account is added. The reason for the drop could be a number of factors like the added inquiry, the new account, changes in AAoA, rebucketing, etc. If I added a new car note, I would expect a small drop of less than 20 and most those points I'd expect to return by 6-12 months. In other words, for any score change give yourself up to a year to recover.

If you think any of the above might impact you, then consider paying cash for a clunker and once you close, then get the car you wanted via a new car note. Or if you aren't looking to buy for a year or more out, get a car note and have the reserves set aside to PIF prior to your mortgage app if DTI would be an issue.

[goodygoody]

Thanks for the responses.  We're actually hoping to get a mortgage in 12-18 months, so I'm thinking that it might be best to get a car loan now, rather than risk needing one closer to when we want to actually apply for a mortgage - that way the inquiry will be gone, and the payments will hopefully increase my husband's rating.  I think we're done with our current van - we actually rebuilt the transmission less than a year ago - it's a Chrysler, and I've read that people have all kinds of tranny problems with them.  I'm afraid if we rebuild it again, we're going to end up with it dying right around the time we need the money and credit for a home loan...

[Anonymous]

I would go ahead with the auto loan if I were you.  I think you will have no problem getting financed.  I just bought a brand new Toyota with a TU 686 score and got 0% interest with no money out of pocket. 

Good Luck!!

[thrasher865]

No advice on the auto loan, but you need to get a Chrysler Town & Country with the stow 'n' go seats and the entertainment option.

I want one so bad, but I've fooled myself into believing I'm too macho to drive a minivan with no kids, so I will live vicariously through you.  

Stow 'n' Go is KING.  I had one as a rental for a business trip last year, and ever since, I have wanted one SOOO bad.  It made the trip to the kennel with the dogs so easy.  I wouldn't even need the entertainment center, I could leave that for the daily.  When are they going to start putting stow 'n' go seats in luxury SUVs?

Now about what you actually asked.  You will not be able to easily obtain a mortgage with a new loan (<12 months) on your reports.  So, it's now or never.