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05-01-2014 06:15 PM
I know the lower the better but what is acceptable for DTI?
I am looking at a 15k used car.
My DTI is around 40% because I pay child support every month.
I have about 3k to put down on a car and my credit is just ok. Around 640-650 on all 3 credit bureaus.
I imagine I have to disclose that as well.
05-01-2014 08:57 PM
Does the child support show up on your credit report and/or is it directly garnished from your paycheck? And what is your monthly gross (before any taxes) income?
05-01-2014 09:10 PM - edited 05-01-2014 09:27 PM
If it's directly taken out of your check, what's the check look like after child support is taken out, but before taxes?
05-01-2014 09:26 PM
Oh okay, cool. This advice assumes the child support does NOT show on credit report and that your rent/mortgage isn't too high:
I honestly think you'll be fine. Generally lenders calculate DTI using what's on the CR. If the child support isn't directly on there, well then...To answer your original question, ideal DTI is like 35-45% for an auto loan. But if the CS isn't on your CR, they are going to calculate a far lower DTI.
Have a local bank or CU you can work with? If not, given the credit profile, DCU and Cap One (Cap One only works if buying the car from a franchised dealership) are probably good to try. I'd start with DCU honestly...oh and when you put price of car into any application (or loan requested), add some taxes and fees "room" to your 15k. So I'd enter like 16.5k car - 3k dp (or 13.5k loan requested) just to be safe.
05-01-2014 09:34 PM
Ok so don't worry about the child support then. Without child support my dti is around 25%.
I also have about 3k to put down on the vehicle in case there are any hiccups.
05-01-2014 09:41 PM - edited 05-01-2014 09:42 PM
Yeah if it's not on your credit reports, don't be the one to bring it up haha. That's one thing about auto loans: the fewer things you bring up, the better.
They may notice when they have you send in your pay stubs, but even if they do, 2750 is a fine income for a 13-14k loan. Like I said before since your EQ score seems to be above 620 and you really don't want much, I'd start with DCU as long as you are not in ChexSystems. Hopefully DCU also pulls a 650+ (maybe even 675+ if you're lucky).
A dealer will definitely get you financed for <6-7% though. So worst case, that's there. But I think you can do better by yourself esp. if we luck out with DCU.
05-01-2014 09:51 PM - edited 05-01-2014 09:59 PM
I will definitely check out dcu and see what they can do. I have seen quite a few people using them for loans on the auto approval post.
I am in dire need of a car soon as mine leaks gas when above half tank.
It doesn't matter that I don't live on the east coast? I see they are based in Massachusetts.
I have appointment set up for 2 weeks from today at the dealership to go over the financials. I have heard sometimes they beat others on interest rates. I was so worried my rate would be 15%. A coworker of mine with bad credit bought a car last year for that rate.
Does DCU also refinance car loans?
05-01-2014 10:02 PM - edited 05-01-2014 10:02 PM
Yes, DCU does refi car loans. Do you mean for your coworker? I don't get why you would have to refi a car loan? If for your coworker, try to get this info from them and post here and I'll give you some tips to pass along: 1) FICO score? Which bureau(s)? If they have none, paying $9 for a EQ score from this (aka myfico) website isn't a bad idea. Other scores that are sold online tend to be useless, so stress the myfico site. 2) Current NADA Retail value of car to be refi'ed? 3) Current amount owed on car to be refi'ed?
For your case, dealers definitely do compete if you come in with a good rate. Worst case, you can use what you were approved for. If you are going in two weeks, I'd highly recommend you apply to DCU like tomorrow or something. That way you can follow up on Tuesday/Wednesday if they don't reach out to you (they're slow often) and there's enough time for paperwork to come to you. Their approval is good for 30 days by the way.
DCU accepts members from all over the 50 US states. If your continental 48, you definitely have nothing to worry about.
Also your credit isn't bad. A 650 is workable with. If your coworker got 15%, I'm guessing they either had a really bad score <600 or they were hoodwinked by the dealer (see dealer participation in my guide here: http://ficoforums.myfico.com/t5/Auto-Loans/Guide-to-Financing-Leasing-and-Refinancing-a-Car/td-p/289... )
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