Which spouse should apply for loan....or both?

[Anonymous]

Hi All,

Recently my wife and I moved to a new state for me to accept a new position in my company. As it turns out my commute is very long and I am using a older car (1990) that is a project car which I am killing with the amount of miles I am putting on it. I have decided to purchase a new car (20-25k) however I am not sure how to approach this loan application. Should I apply or both my wife and I? Our credit report shows the following:

Me

Credit cards

Capital One           $750 limit $0 Balance

Capital One           $3000 limit $0 Balance

I also have two charge offs, the latest one being 2.5 years for $100 (cable box) and they are paid off now. I have once used auto loan about 5 yrs ago which has been paid for years, no late payments. My current income is about 70K and I have been employed at the same place since 1997. My FICO is currently 665 due to CO which is my only blemish.

Wife

Credit cards

Chase                 $10,000 limit $0 balance

Amex                    $10,000 limit $0 balance

She has no problems with her credit report and is showing a 780 FICO. Since we moved to a new state she is unemployed and her only income is unemployment insurance from the state we moved from.

Are we better off just me applying or I am better off with a joint application? I do have a credit union I am a member of, would they be interested at my FICO level?

Thanks,

Mike

[Anonymous]

As long as your income alone is enough to pay all obligations including your wife, include her, if includind her will trip your DTI to an impossible level then do not.

If your commute is that long, remember: you are going to kill any car that you get so consider used and reliable.

if yoru commute is that long and it is simply point A to point B, sinc eyou just moved there consider moving. Cutting your commute in half each way is a greater quality of life pop, lower gas cost and lower time cost then most people think. Even if you paid $200 more a month, you could easily save half+ of that in gas alone.

Call yoru credit union and see what they will be willing to do. In general credit unions trend to be the best lenders.

[Anonymous]

Hard to explain but moving is not an option.

My DTI with spouse is 14.

[Anonymous]

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@Anonymous wrote:

Hard to explain but moving is not an option.

My DTI with spouse is 14.

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14? umm  percent?  What? Monthloy Debts and obligations as a factor of Gross income(not including overtime)

RE: moving just threw that out there. If that is the case where you can not do anything about your mileage, there are two main roads you can consider A new car that will be fully warrantied or a reliable used car that is CPO with some warranty (you can also consider just a used car with with high reliability)

If you are putting that much mileage, warranty will quickly no longer be a concern. The big three I would consider will be size, reliability and fuel economy. Unless you need it for work there is no reason to buy a truck or a large SUV for your work commute.

Cars in general do not appreciate. When you put them in a situation where you are putting  a huge amount of miles on them, they are first and formeost commodities like toilet paper- and you need to make a well informed decision on the purchase.

[Anonymous]

Yes 14%, I went to on online calculator. I rent, not own and my rent is low. I also only have a few CC and that is about it.

[Anonymous]

This really is quite simple. She has the higher credit score so of course she will get approved at the best interest rate. But you made no mention of her working or not, but assuming she is working you want to have her apply for the loan herself (so you have the lowest interest rate).

If you feel you want to help your credit score by having the auto loan reported on your credit report, the best thing to do would have both of you apply for the loan. When that happens, typically they use the median of your scores. So you should still get a very good rate and it will build your credit score as well.

You make $70,000 a year, with no credit card balances and low rent. The DTI shouldn't really even be an issue on a 20k-25k vehicle.