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Auto Loan Before Mortgage?

Frequent Contributor

Auto Loan Before Mortgage?

We hope to have our credit fixed up and get a mortgage next spring/Summer. We currently have a high interest rate auto loan. If we trade it in for another car late this yer with a much lower payment will that be a negative towards getting a mortgage?
Current Score: FICO EQ670-TU680-EX700
Wallet: Cap One Rew. $3500, Cap One QS $2500, Barclay $2650, Old Navy Visa $3000, QS-2 $2500, Credit One $2500, BoA $5000, Chase Freedom $3000, Slate $3000, Wal-Mart Discover $3000-STORE CARDS: Amazon $3500, Lowes $2000, Kay's $7600
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2 REPLIES
Established Member

Re: Auto Loan Before Mortgage?

Probably not. You'll take a slight hit for the credit pull on the new car loan, but that will not be as big of a deal in a year's time. Also, having a lower car payment will help in terms of your DTI.

Message 2 of 3
Established Member

Re: Auto Loan Before Mortgage?

I think it would be better. Should help your DTI. I am actually currently in escrow after purchasing a new car with a high interest rate on 12/31/2011. I was told I would have probably been approved for a bigger loan but because my car payment was so high they couldn't approve me for more because of my DTI. I probably should have waited on the new car but just had my first child and needed something bigger than what I currently had.

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