I've had one car loan before, but one of my parents cosigned, so I'm not quite sure what to expect this time around. I have decent credit scores and good income, but student loan debt and a lot of credit card debt from when i was laid off in 2008. Have been in my current job for 2+ years. Current salary $101,000, increasing to $107,000 on 12/1. I usually get a 5-10% bonus every year too. Mtg payment $1700 a mo, student loan payments $500 a month, total credit card payments $640 a month.
My debt to income ratio right now is about 35%. With my new salary, it will be about 32%. This is not factoring in my bonus, because I don't know how hard it is to prove that as part of my income (it's not a guaranteed amount). The car I want is $40,000. I plan on putting $7,000 down leaving the amount to be financed at $33,000. Depending on the rate and term, I'm guessing the monthly payment will be between $500 and $600. This will drive my dti up to just over 38%. Ideally I would wait a few months and work to pay the cc debt down, which I will continue to do, but I was shocked that i can get $7K for my old car (last time i had it inspected, i was told it would need about $2500 worth of work within the next 5-7k miles). I really want to get something before anything goes wrong with it and i'm in love with the car I found. If it's too much car and I need to adjust my price range, that's fine, i just don't think having an additional $600 payment will impact me that much. Especially since I'm getting a raise. I do have about $3K i could use to pay off some of the cc debt or use towards the down payment, not sure which would be better in the long run.
Do you think i'll have trouble getting approved b/c of the high dti with the new payment? My scores are Experian=717, Equifax=720, Transunion=727.
Starting Score: 627 EQ, 621 TU - 11/15/08