Down Payment to Refi?

[sekada]

If I have to buy a car before a fraudulent credit baddie falls off my CR -- and I decide to refi once the baddie is off -- will I have to pay another down payment?  I have about $3k to put down, but that's all the cash I'll have for the next several months.  Should I save $1k for a possible refi? 

[Remember0]

We're going to need more context. Which car are you buying and are you buying new/used? Also year if new (2013 vs 2014)?

[Jedimaster]

several of factors will determine your down payment, such as your score, your income, your  current debt, and if you have have collections a financing loaner considers you a higher risk and would require a higher Down payment 

take me for example, I have a fico 677 Transunion, with 4  collections that are 6 years old almost about to fall off my reports, but I was told by auto finance manger that my socre should had given me a 6% APR on a loan but because of my collections I was seen as a risk and the lowest interst APR I could had gotten was 11% APR

[Remember0]

^I think the OP is talking more about if he needs to bring money to the table when he wants to refi. I think the answer to that question depends a lot on the collateral he's looking to purchase as I stated above in my prior post with questions on the car he was going to buy.

[RushXTC]

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@Remember0 wrote:

^I think the OP is talking more about if he needs to bring money to the table when he wants to refi. I think the answer to that question depends a lot on the collateral he's looking to purchase as I stated above in my prior post with questions on the car he was going to buy.

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As Remember0 said, It's hard to tell when we don't know what car it is.. Remember, They will only refinance what they think the car is worth, Not what you paid for it! This is to save themselves incase it needs to be repossessed. If they feel it devaluated, They will probably ask you to pay off a certain amount to reach the max refinance amount for the car. What is the current APR you're being offered btw?

[sekada]

OK I see your points.  Car will be a 2014 mazda3 hopefully SGT... haven't finished negotiating on price yet and finance will get figured out next week.  I have a fraudulent credit baddie that *allegedly* will take at least 30 days to drop off my report, but I need a car before then.  So I *might* have to pay a higher interest rate than I want to.  OTOH, I got a credit alert today that the account in question has updated, and no longer reflects the credit baddie.  So far, it has not budged my credit score, but I'm hoping that it will within the next few days -- honestly, I've gotten so many conflicting stories as to how long this will take to recover my CS, that I don't know who to believe.

Price likely will be around $23,500 + whatever tax/tag/title.  As I said, I have about $3k - $4k to put down on the original loan -- but if the interest rate is too bad, I would want to refi when the credit score goes back up.  So I'm guessing from replies that I would really have to wait about a year -- that way I would pay down enough principle to cover some of the new-car depreciation, and I will also have more cash saved up by then for a more meaningful DP.  Even if I put down a $2k DP on the loan that I'm getting now, and save the other $2k for a refi DP, that wouldn't cover the depreciation -- right?

[Remember0]

Maybe I'm wrong, but on a 2014, I thought if you wanted to refi ASAP they'd use NADA retail which doesn't have the "driven off lot" depreciation... Like I said, I could be wrong, but if anyone has bought a new car and refi'ed immediately, some input would be great.

As a lender, think about it. If you used DCU to purchase, they'd be taking that drive off depreciation risk. So for a new car refi like 2 months after purchase, seems to me to be no more risk if they refi'ed purchase price essentially.

Also looked up what retail on a 2013 3 sGT is on NADA w/ 5k miles and it shows 21.75k. So even if they accounted for depreciation, I think with 4k you'd be fine if bought for 25k. Negotiate well and I think you'll be fine.

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On another note, pull your reports (not scores, reports). Are any baddies on them? If not, you're set...your score is already fixed and when the dealer pulls, they'll see your regular score (with no baddies). In fact they won't even be able to tell the baddie was ever on there.

[RushXTC]

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@sekada wrote:

OK I see your points.  Car will be a 2014 mazda3 hopefully SGT... haven't finished negotiating on price yet and finance will get figured out next week.  I have a fraudulent credit baddie that *allegedly* will take at least 30 days to drop off my report, but I need a car before then.  So I *might* have to pay a higher interest rate than I want to.  OTOH, I got a credit alert today that the account in question has updated, and no longer reflects the credit baddie.  So far, it has not budged my credit score, but I'm hoping that it will within the next few days -- honestly, I've gotten so many conflicting stories as to how long this will take to recover my CS, that I don't know who to believe.

Price likely will be around $23,500 + whatever tax/tag/title.  As I said, I have about $3k - $4k to put down on the original loan -- but if the interest rate is too bad, I would want to refi when the credit score goes back up.  So I'm guessing from replies that I would really have to wait about a year -- that way I would pay down enough principle to cover some of the new-car depreciation, and I will also have more cash saved up by then for a more meaningful DP.  Even if I put down a $2k DP on the loan that I'm getting now, and save the other $2k for a refi DP, that wouldn't cover the depreciation -- right?

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I would give the full $4,000 DP because in the end, It'll be better that way. Try telling them you have $2,000, Then when they offer you a certain APR, Ask if you can get a reduction to that rate if you throw in another $2,000. Just try anything to lower it down. I fought my APR from around 12% to 3.29% LOL.

Whatever you do, Do NOT make it look like you NEED a car... Make it clear that you want a car, but don't NEED one. If you give $4,000 now you'll save some $$ on the payments because even at a high APR, It's less interest. That would be the same as giving $2k now and $2k at refinancing, but better. Since you owe less than what the car is worth from the get go.

[StartingOver10]

Agree with the above ^^^. Put down the $4k but don't tell them you have that to put down right away. Remember to negotiate the price of the car and not the monthly payments. Check the contract before you sign to catch any 'errors' in interest rate and term. It's pretty common for the F&I guy to try to sneak in an extra year on financing or to bump your rate. They assume you won't read the contract before signing because many people don't take the time to read it before signing. Never accept the first interest rate the F&I guy gives you...or the second rate....get the best you can get. You might have to walk away to get the best rate available given your 'baddie'. Remember this: the F&I guy will try to guilt you into a higher rate because of the baddie. You can still negotiate to get it down. They want the sale too. He is trained to look for weaknesses in your CR and use them against you. You need to point out your strengths.

[black_citi]

DCU refied my entire amount i owed. The NADA for my car was 17725. I owe 20177. At first they were telling me i needed about 2200 to get me where i needed to be and i have the money to do it, but when i called the next day, i spoke to someone who already had all my paper work and she said they can refinance the entire 20177. Which they did since I already signed the paper work lol. It guess it depends.