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Frequent Contributor
Hammer23
Posts: 428
Registered: ‎01-21-2012
0

Auto loan advice from an Underwriter

[ Edited ]

Good Day MyFico family,

 

I have been watching this thread for quite sometime and decided to see if I could lend some of my experience to help some others out there.

 

Here is a little of my background:

 

- 5 years experience as a Business Manager / GSM for a multi-line car dealership.

 

- 5 years experience as an auto loan underwriter / loan manager for a large national auto finance company.

 

Currenlty I am employed by a large national auto finance company where I make decisions on loan applications submitted through select dealerships. I manage a team of underwriters and handle esclated requests from lower level underwriters.

 

I must state that anything that I say here is my personal opinion and does not in any way indicate the opinion or policies of my employer. Any comments made by me are in no way a reflection on my employer or represent a commitment on behalf of my employer. My statements have not been reviewed or approved by my employer for accuracy.

 

So with that being out of the way, what questions do you have?

 

 

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Valued Member
BeeH11
Posts: 47
Registered: ‎10-20-2012
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Re: Auto loan advice from an Underwriter

Hi! 

Thanks for the offer to try to give advice. Here's my situation:

in the spring (May or June) I am going to be looking to buy a new car. My current scores are 698, 702 and 715. I have never been late, nothing bad on my report other than high utilization on credit cards. Right now, I have 2 cards maxed out (but by end of May, will be at around 50%) and 4 store credit cards that have $0 balance w/ low limits. I have never had a car loan (always paid cash for cheap used cars). I make a little over $50k a yr. Hubby & I will be declaring about $140k for 2012. But my husband will not co-sign w/ me. He has own car loan and we actually keep our money pretty separate. I only pay utilities of $330/month and he pays everything else. As far as loans go, I have student loans and 1 Prosper installment loan. I've heard student loans don't help w/ car loans but I don't know about the Proper installment loan.

My question is do you think I would be able to get a car loan w/o a co-signer (and good interest rate) in May or June w/ 50% utilization on credit cards? The 2 major credit cards I have are Amex w/ $6k limit and Capital 1 w/ $5k limit. My credit is 9 years old. I'm looking at a $28k vehicle before taxes. I would rather have no or little down payment. Not a lease. 

Thanks for any advise you can give me.

AMEX Blue. Chase United MileagePlus Explorer. Chase Southwest. Capital One Platinum. Express. Victoria Secret. NY&Comp. Macy's.
Frequent Contributor
Hammer23
Posts: 428
Registered: ‎01-21-2012
0

Re: Auto loan advice from an Underwriter

[ Edited ]

Hi there! 

 

If you have 9 years in the file with a good history you should have a good shot at an approval for what you are looking for. Being that you have limited auto experience, loan to value will play a big factor in your interest rate. While I don't think money down will be needed, it may help secure a better rate . 

 

I don't see $28000 being an issue with your debt load and income. With a lack of prior auto credit how you pay your other lines will be even more important. Your prosper line will be given greater consideration in this case. 

 

 

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jimmynic
Posts: 3
Registered: ‎01-27-2012
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Re: Auto loan advice from an Underwriter

[ Edited ]

First and foremost, thanks for offering the help!

I want to buy myself an optima, 2011-2013 (new model) I have no previous auto loans, I have one installment loan of 8,000 that was paid off in 3 months from getting it, I'm planning on buying the car during tax season, I have 5 tradelines, a total credit limit of 7950 plus my Amex which has no preset limit. (Not sure if that matters), I only make 22K a year, the car is roughly 19,000-25000.. I would lease if need be, my scores are in the high 680s and low 700s with nothing bad on my report, no lates, charge offs, nothing! Will my income ruin my chances if the car cost more than my annual income? my total debt per month is 650, I have 3500 down if needed. Are my chances very low? ThanKs again! 

 

Ps sorry if there's any misspelled words or punctuations, typing on my Iphone. 

Valued Member
BeeH11
Posts: 47
Registered: ‎10-20-2012
0

Re: Auto loan advice from an Underwriter

Thanks!

It's good to heat the proper loan should count.

AMEX Blue. Chase United MileagePlus Explorer. Chase Southwest. Capital One Platinum. Express. Victoria Secret. NY&Comp. Macy's.
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Revelate
Posts: 9,738
Registered: ‎12-30-2011
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Re: Auto loan advice from an Underwriter

[ Edited ]

With your experience (if you can describe it in general terms), can you talk a little about the auto-enhanced score?  The "first-time-buyer" penalty is well known both here on this fourm and elsewhere: anecdotally we know that someone with just credit cards is going to be slapped with this on their auto-enhanced score; however, as you suggest with a Prosper loan (personal loan, installment tradeline) being helpful as we've thought in the past, would you rate the other two installment loan types (auto ones being obviously counted) for their relative weight in the auto-enhanced score?

 

- Mortgage loan

- Student loan

 

Thanks!

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Ld78
Posts: 1
Registered: ‎10-21-2012
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Re: Auto loan advice from an Underwriter

Hi. My husband and I have verybad credit with scores around 560. We are behind on our mortgage and havea often been late on our payments including auto, although the auto payments are always made. Our car just died and I think we're looking at quite an expensive repair, to where we shouldconsider buying a new/new used car instead. Our combined yearly income is about $160,000/year. We'd be looking at a loan of about $23,000. Do you think we can get a loan? We might be able to put some $$ down, like $3,000 or so. Any help and advice you can give would be greatly appreciated. 

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Senior Contributor
StartingOver10
Posts: 4,545
Registered: ‎03-06-2010
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Re: Auto loan advice from an Underwriter


Ld78 wrote:

Hi. My husband and I have verybad credit with scores around 560. We are behind on our mortgage and havea often been late on our payments including auto, although the auto payments are always made. Our car just died and I think we're looking at quite an expensive repair, to where we shouldconsider buying a new/new used car instead. Our combined yearly income is about $160,000/year. We'd be looking at a loan of about $23,000. Do you think we can get a loan? We might be able to put some $$ down, like $3,000 or so. Any help and advice you can give would be greatly appreciated. 


Based on your post, you would be better served getting a car for cash and not adding another high interest rate loan to the mix right now. F&I guys would really take you to the cleaners given your current situation as you described above. Rather than letting a finance guy hit you with a high rate, take a breather for a bit on the next vehicle.

If you are grossing $160k it shouldn't take that long to put together $10k to purchase a decent vehicle for cash for the short term (6 months to a year) while you work on getting your mortgage current and fix the existing auto loan(s).  Once you get back into the habit of paying ontime, you can negotiate a much better interest rate on a future auto loan. JMO from having been there and done that ....

Member
SEACOASTNHMAN
Posts: 9
Registered: ‎06-16-2009
0

Re: Auto loan advice from an Underwriter

what are the key factors that lenders are looking for to give a approval for a loan ?

 

thanks

 


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Frequent Contributor
Hammer23
Posts: 428
Registered: ‎01-21-2012
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Re: Auto loan advice from an Underwriter


jimmynic wrote:

First and foremost, thanks for offering the help!

I want to buy myself an optima, 2011-2013 (new model) I have no previous auto loans, I have one installment loan of 8,000 that was paid off in 3 months from getting it, I'm planning on buying the car during tax season, I have 5 tradelines, a total credit limit of 7950 plus my Amex which has no preset limit. (Not sure if that matters), I only make 22K a year, the car is roughly 19,000-25000.. I would lease if need be, my scores are in the high 680s and low 700s with nothing bad on my report, no lates, charge offs, nothing! Will my income ruin my chances if the car cost more than my annual income? my total debt per month is 650, I have 3500 down if needed. Are my chances very low? ThanKs again! 

 

Ps sorry if there's any misspelled words or punctuations, typing on my Iphone. 


Your income won't disqualify you alone. Your other debt will be looked at to make sure you can afford the payment. With your scores you should qualify for the promo rates through Kia I would think. Leasing should be an option as well. 

WF Home Projects Visa $8500 / Towpath CU Visa $7000 / Chase Freedom Visa $5500 / Cap 1 QS Visa Sig $5000 / Barclaycard Ring MC $5000 / GE Lowes $5000 / Citi Best Buy MC $4250 / Barclaycard Rewards Visa $4000 / BFG CU Visa $3500 / Citi Sears$3000 / WF Visa $2000 / GE Walmart $1900 / GE Care Credit $1900 / GE Amazon $1400 / Cap 1 Kohls $1000 / GE Old Navy $800 / Webbank Fingerhut $700

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