Should we buy now, or wait?

[Anonymous]

I'm sorry if this gets long.

My husband and I really need a second car and I'm trying to figure out if we should go now or wait and if so for how long. I would rather buy it soon, but I may have to wait for the credit reports to update.

our scores were in the low 620s when I checked in February, but we just paid off a lot of debt.

My husband has $11,050 credit limit combined and right now $4,554 debt, it used to be $10,000

I have $13,700 credit limit combined and $5,725 debt, it used to be $13,000.

Out of both of our debt $2,450 is a gift my dad bought us, but because he was out of state we had to financed some of it in our name. It used to be $4,000 but he's paying it off about $200 a month sometimes more.

My husband also has a student loan that he's had for a very long time, that's down to $1000, and the mortgage is in his name only, we got it in June of 2008. He also has a bankruptcy on his credit report. It was discharged January 2006. He's the sole provider and has been at his job for 5 years.

My score is low because I've only had Credit Cards for about 2.5 years, and that's it there's nothing else in it.

I was thinking of getting a personal loan for $2,500 and paying off the gift from my dad. That way my husband's debt to credit ratio will drop and I would have an installment account on mine. This way we could hopefully get a good rate on a car loan.

We would like to get the car in both of our names but if we have a better chance of a better rate in just one of our names we wouldn't mind. We plan on getting all 3 credit reports and scores before we go out to look at cars.

So what's our best plan? Should I try to get a personal loan to pay off the $2400, maybe all of our CC debt? Should we try to get approved now or wait a month or two?

[Anonymous]

Try for an approval now, assuming you have a thousand (not gotten from a personal loan from a bank) to put down for a down payment.

The negatives on your accounts, for purchasing an automobile are really not going to be mitigated much.

Your DTI ratio is OK  for an approval now.

Provable income, and down payment, along with exactly waht vehicle you are looking at will be the big factors.

[Anonymous]

I looked at our Equifax credit yesterday and they're still showing all the debt. So according to that we have a DTC ratio of 90%+. So should we wait until they update for March or just give it a try now?

We do have $1000 in cash that we could use, we could do $2000 down.

Should we apply with a CU, bank or dealer?

[llecs]

I'd wait if it means getting a lower rate.

[Anonymous]

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Should we apply with a CU, bank or dealer?

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Honestly I think that as long as you have good income, and with the facts being as you have stated, it really will not hurt you to start looking beofre the debt falls off. (assuming I read your original post correct and outside of the mortgage you all have less then 50% UTIL currently showing)

If you are still showing a 90% UTIL, do not try now unless you really need the vehicle, you will be penalized somewhat in rates.

On a plus side:

You have re-established since the BK.

You are a homeowner.

You may have to have the deal done together, that may not be any other option just because the young nature of your 2.5 Y/O credit.

Start checking with your bank or any credit union you are a member with, just make some inquiries do not apply yet.

You may find that your bank does not offer great loan rates.

Check and see if your husband or youself qualify for NFCU membership or USAA membership. They will help you get a loan.

Start doing the leg work now online on what kind of vehicle you want/need (new/used, how old) so you have an idea what you are going to be financed.

Once your UTIL drops, try to secure some financing on your own and also at the dealership.

You never know if a dealership can secure financing better then you can.

[Anonymous]

I think you should get a beater car for 2-3k and then save up and pay cash for a car that you want / can afford. Not the most popular plan I'm sure   - my 2 cents

[Anonymous]

I think you should wait for the credit bureau's to update completely with the March payments. This usually should occur at the end of the month. I suggest that you apply with a credit union first and NOT a dealer. Once you get an approval from a CU' then you can go ahead and shop.

Patience is key here not to get stuck with a really high interest rate. Hope this helps!

[Anonymous]

Thanks everyone for the advice. As of last night my husband's scores were in the low 670s on Equifax and TransUnion. Mine are still lower, but we're still waiting for some of the payments to go through about $3000.

I already spoke with our CU and other banks and I'm positive will be able to get something good. This is a car we need and considering it's going to be the kids and I most of the time in the car I want something good. We were going to wait until June but due to other circumstances we'll have to get it by the second week of April, either that or we pay over $200 a week on a rental.

[Anonymous]

Try a pre-owned car. You can get a very good car at a good price, also if you have a Carmax near you try them. This way you at least know you are not getting a piece of junk that is going to fall apart anytime soon.

That being said, if you are struggling at the moment (and who isn't) you should wait until your scores update. While a 670 will get you a car, a 680 can get a lot better APR, which saves you money on the loan and monthly payments. If this is a must have, then try to get pre-qualified through the credit union first. That way you will know what you can spend and not get taken to the cleaners.

[Anonymous]

Oh yes, we'll be buying a pre-owned car. We're going to try Carmax or similar places.

We've lived with just one car for 5 years, and now with 3 kids, 2 of them going to school and different schools I need to have a car. We also need a car that can sit at least 7 people as we get visitors often. We're looking at spending $12000 max on the car, and have already seen some that we like. We'll probably wait until the the second week of April to get it, that way our credit reports can update and our scores go up.

Also now that we've paid most of the debt off we'll have about $500 left each month but I don't want to have monthly payments over $300 so we need a good rate. I also already checked out insurance and made sure we can afford it too.

No we play the waiting game.

Thank you everyone for the advice.