Can I qualify for a mortgage and should I refi my car?

[Anonymous]

I'm starting to look at houses and a few questions.

First will I qualify?

1. Credit. EX= 640 EQ=653 TU=670

1. Income.  Gross was 63k last year and I got a 5% raise this year so about 70k

1. Source of income.  Major Corporation. Been here about 6yrs

1. Monthly debt payments.  Just moved back to my parents to save money. Only bills currently are car payment= $440, cell phone=$95, 2 CC with about $50 balance on both

Employment Full time

Assets/Reserves.  In the process of selling my street bike so I'll about $7-8k when ready to buy

Location.  Windham County, CT

.

1. Property.  Looking at single family and 2 family (owner occupied)
2. Value.  Around $150k
3. Occupancy.  Primary residence.
4. Transaction Type. Purchase

Only real negatives on credit report is a charge off that is paid from 05 and a few late payments from street bike loan that I paid off in Feb. '11.

Now should I refi my car?

My credit was around 530 in April '10. My car died so needing a new one quick the only people that would finance me was credit acceptance at 17.9% interest on a 3yr loan. I'm currently paying $440 a month and have about 20 months of payments left. Always pay on time. Now that I took care a bunch of things on my CR and my scores are up I was thinking about refinancing my car on a 2 year loan to lower my interest rate and lower my payment a lil bit and make my debt to income ratio a lil better. Would this hurt my chances of getting a mortgage at all?

[Anonymous]

Well after browsing thru these threads i realized those credit scores are FAKO's so i bought my fico scores.

TU=660 and EQ=662

[BrianB_The_Loan_Professor]

Scores are fine for FHA

Everything looks fine as is -

IF you intend to buy soon I would wait and refi the car afterwards - it will create a messy papertrail that will need to be done and just kind of complicate the process - it should not hurt your chances just sort of muddy's the water a little - 

if you are going to wait a while then by all means get out from the rate on the car and get through the process - once the new loan is reporting on the credit report it will be a non issue on the purchase - 

Good Luck on your purchase

B

[ShanetheMortgageMan]

If you do refinance your car before you close on a home, have your credit checked for the mortgage first and then do the car financing aftwerwards, as the:

1.  Inquiry for the car loan

2.  Paying off your old car loan

3.  Establishing a brand new trade line

May all impact your scores, and you wouldn't want them to decline.  To document the new car payment you would need a copy of the Truth-in-Lending statement which is provided with your paperwork, on there it should specify the new car payment.  You would also need proof that the new car loan paid the old car loan off, which the check that the new auto loan company gives you to send to your current auto loan company would be sufficient (sometimes they will pay it off directly by bank wire, if so, ask them for a printout of their bank wire transaction).  Once your old auto loan is paid off then it's easy for the credit report company to confirm.

But like Brian said, you don't need to reduce the payment in order to qualify for what you are looking to qualify for.

[Anonymous]

Ok thanks guys for the help. I think i'll just hold off on refinancing my car til i figure out how soon i wanna buy a home.

Based off my original post would i qualify for the usda 100% financing? Based on my income and my area it says i am eligible for  the 502 guaranteed housing loan. Or would it be better to wait til i have the 3.5% saved for a down payment and do a FHA loan?

Thanks for all the help guys.

[ShanetheMortgageMan]

Yes you would be fine for the USDA loan as you currently are, it would have about the same interest rate as an FHA loan as well as will have a lower monthly payment, so I would recommend USDA over FHA if you can find a home in an eligible area (which I see Windham County, CT has plenty of).