01-28-2013 08:05 AM
01-28-2013 08:08 AM
01-28-2013 08:11 AM
01-28-2013 10:04 AM - edited 01-28-2013 10:08 AM
The mortgage is several years out. The OP has enough cash on hand (or possibly more) to put down a 50% downpayment on the car... which in the vast majority of cases means the OP doesn't have a cash flow issue. Any downpayment over 30% is completely superfluous to the point of assuring auto-loanage assuming there's any rational expectation the payments can be made. If two paystubs can be produced, the approval currently is just not a problem, and there's more than enough time to make things pretty pre-mortgage either through refinancing it or throwing money at it.
We're seriously overthinking this .
01-28-2013 10:12 AM
01-28-2013 10:21 AM
Well if the mortgage is two years out, she could get a 24 month lease. That way if the monthly payment is too much for the mortgage, she has the option of not releasing but most lenders assume you will continue to lease.
I have never heard of anyone putting 50% down on a lease.
The lease conversation has been between you and SO10 . I'm not certain this was ever in the OP's plans.
01-28-2013 04:18 PM
02-02-2013 06:58 PM
02-02-2013 07:13 PM - edited 02-02-2013 07:13 PM
Thank you all for the input. I'm a small business owner and make little over 250k a year. I was looking to finance a car because I thought perfect payment history would look great upon purchasing a home two years from now when I improve my scores. I can certainly buy a car cash like I did with my current vehicle, but I doubt that will do anything towards my credit scores. Should I lease? Or finance any other opinions? You guys have been very helpful thank you
I'm of the opinion auto loans do look good in general; SO's comment was that open auto loans will be factored into your DTI calculation which could hamper your ability to get a house when they calculate the ratios. Your rationale is almost entirely the reason I financed my car, would've been easy for me to pay cash for a reasonable car but I needed improvement in my scores. I don't have an income problem (except I can't pay cash for a 700K house around here, stupid CA prices) I have a credit problem. Sounds like your situation is analogous though perhaps not quite as bad as mine was.
I was looking your situation from the perspective that you could pay cash now, the interest probably isn't that big of a deal compared to the mortgage later if you can move up a tier, and you can always pre-pay the loan down below the minimum amount that it'll be factored into DTI calculation anyway. SO is admittedly much, much more savvy than I am when it comes to mortgage lending, but I think you have the available resources to play silly FICO games to try to setup your credit profile for later goodness.
I certainly wish I'd financed a vehicle much earlier in my own life, I paid cash for everything till age 36. I was once labelled as the dumbest smart kid ever when I was 14, not sure about the smart part anymore, but dumb is probably an appropriate label looking at that situation. Leasing meh, unless you want to flip your car every couple years it doesn't make sense.
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