Mortgage Loans

[NewHomeBuyer]

My wife and I will be going for mortgage pre-approval in the end of September / beginning of October.

We also need to get a car.

She has great credit and a lot of money in the bank.

I have poor credit with a Fico of 670 and several ugly blemishes on my record (several credit cards which went in to default and were settled or paid off in full).  However, I am doing fine now and have been on solid ground for approx 1.5 to 2 years.

Will buying a car in September, right before the mortgage pre-approval, negatively impact my Fico?  And if so, how seriously will it effect my score?

Should this act be avoided until after the mortgage pre-approval?

[VLGaffEsq]

The bottom line is, if at all possible, you and your wife should WAIT to purchase the car until AFTER you purchase and go to closing on your house.  Most lenders do not like to see you trying to obtain more credit when you are trying to buy a house.  If I were in your shoes and I absolutely needed a car, I would utilize 3 to 4 thousand dollars of my wife's cash and buy an older used Honda to drive for a couple months, and then sell it after you close on you new house and go for the purchase of the car you want.

[Emy]

It affect your score. Beware that the bank will check again your score, just before closing. My bank checked the score again to see if anything was changed with 2 days before closing. Good luck with the house.

[steelfan]

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NewHomeBuyer wrote:

My wife and I will be going for mortgage pre-approval in the end of September / beginning of October.

We also need to get a car.

She has great credit and a lot of money in the bank.

I have poor credit with a Fico of 670 and several ugly blemishes on my record (several credit cards which went in to default and were settled or paid off in full).  However, I am doing fine now and have been on solid ground for approx 1.5 to 2 years.

Will buying a car in September, right before the mortgage pre-approval, negatively impact my Fico?  And if so, how seriously will it effect my score?

Should this act be avoided until after the mortgage pre-approval?

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Since your wife has excellent credit, are you atleast a AU on any of her cc accounts?  If not I would have her add you to the ones that are the oldest and have clean payment history.  This will bump your score up to get a even better mortgage rate 

[HouseHunter]

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Emy wrote:
It affect your score. Beware that the bank will check again your score, just before closing. My bank checked the score again to see if anything was changed with 2 days before closing. Good luck with the house.

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I've heard people talk of some having their credit checked again within minutes of signing the paperwork.  I'll be biting my nails until the last John Hancock is in ink.

[Tuscani]

Definitely wait. You do no want to "spook" the lender.

[vaupinya1]

I don't a 670 is a bad, it's actually average!

[ronq]

I wouldn't do it. Your lender might balk and say hold on we can't fund this loan.

[cfstr1]

Agreed. WAIT! WAIT! WAIT!

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Tuscani wrote:

Definitely wait. You do no want to "spook" the lender.

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[NewHomeBuyer]

Thank you all for the feedback.

I am definitely going to wait on the car.

The house is the primary objective and we must not do anything that could potentially derail that.

Thanks.