09-06-2010 10:52 AM
nes makes an excellent point - I didn't think of it before since you mentioned your DTI was low - but if your monthly payments on this 33k loan exceeds a certain percentage of your monthly gross income, that might be a red flag to the dealer. I can't say for certain what exact percentage would raise that red flag, though I would say anything over 20% may be a problem. Through the Mazda college grad program, one of the criteria for approval is that monthly payments may not exceed 15% of monthly gross income.
On a $33,000 loan at a 0% interest rate for 60 months, I calculated the monthly payments to be about $551 per month. An income of 30k/year translates to about $2500 gross income per month. So you can see that the car payment already eats up more than 20% of your take-home pay. Keep in mind that I'm also assuming you get the best interest rate at 0% and a long term of 5 years. Your monthly payments could very well increase much more depending on what credit tier you qualify for.
If you could come in with a larger down-payment that would drastically reduce your monthly payments, that might help ease the dealership's worries. Try giving this hypothetical to the dealership and see what they say - I find it hard to believe now that they would deny you based on just your short 4-year credit history.
09-10-2010 05:15 PM
09-11-2010 07:27 AM
09-14-2010 11:00 AM
Are you trying to use Ford Motor Credit?
Regardless, you don't make enough to buy a $30k car. I think $20k loan for someone with your salary is very generous. There are a lot of pretty nice cars you can get (used) for $20k.
09-14-2010 05:12 PM
09-14-2010 05:24 PM
Creditors want to see at least 12-24 months of clean history usually. Recent baddies are a sure sign that something is wrong especially if they have the income they say
09-15-2010 03:43 PM
Your income is holding you back some id imagine, no lender wants to loan you more then you make in a year. A 33000 car loan is easily a 600+ payment, plus insurance and gas will put you over 1k a month, if you make 30k a yr(2500 a month) I can see why they would be reluctant to lend the money, esp if you have auto credit...
+1 --- I agree your income is also holding you back somewhat, but I think the biggest thing is that you need "auto loan" history as well. Do you have any student loans that are currently in repayment? Or would you be willing to get a cheaper vehicle for about 6 months and then go get the car that you want? Do you have a CarMax in your area? I've always liked dealing with them. Was this a new or a used vehicle? I don't recall if you can apply for credit directly on Ford's website.
09-15-2010 04:26 PM
09-15-2010 05:17 PM
If you make a minimal downpayment on a new car and plan to get out in six months you're guaranteeing yourself negative equity. Have you thought about looking at a certified used car? I just financed one through Ford Credit on good terms considering my credit scores and recent BK.
09-17-2010 09:59 PM
You don't qualify because they are probably using the lower FICO scores of the two applicants. If one applicant has an 800 FICO but no income, they won't qualify for a loan because while they demonstrate they are willing to pay back the loan, they have no means of repaying it without income. If the other applicant has a 500 FICO but makes a a six-figure income, it is still a tough sell to the lender because this applicant has demonstrated a low willingness to repay debts.
While I do not make enogh at the moment to get approved, why is it that with a co signer that makes close to 100k I still get denied? With a combined income of 120ish/yearly income wouldn't that be enough to secure the deal? I have the scores, he has the income, debt to income good, so ....
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