How Long Do I Have To Wait To....

[vxangelxv]

Hi, wanted to know how long I would have to wait to buy a home? I just purchased a new car yesterday, and traded in my old one. How long do you have generally have to wait to get into a home after purchasing a car?

[MattH]

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@vxangelxv wrote:
Hi, wanted to know how long I would have to wait to buy a home? I just purchased a new car yesterday, and traded in my old one. How long do you have generally have to wait to get into a home after purchasing a car?

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We cannot answer that question without much more information, because mortgage underwriting takes many factors into account, mostly expressed as various ratios:

The borrower's credit history and FICO score
Any co-borrower's credit history and FICO score

The LTV (Loan-To-Value) of the intended purchase (more down = less risk to lender)

The particular market where the borrower plans to buy (in declining markets the lender wants a bigger down payment in case the house continues dropping in value)

Source of down payment

Amount of cash reserves borrower will have after down payment and closing costs (banks like to see evidence you'll have some reserves to cover the inevitable costs of home ownership, for instance in the six years since my wife and I bought our current residence we've replaced the A/C, the furnace, the water heater, both toilets, and various smaller items)

The borrower's employment and residential history (somebody who has lived at the same address for 10 years and been with only two different employers during those years is safer than somebody with three employers and two residences in the past four years)

DTI (Debt-To-Income) ratios, both (1) monthly house payment divided by income and (2) all recurring obligations divided by income.

SO, if you still have adequate cash remaining after your down payment on the car, and you don't have much other debt, and the car payments still leave plenty of income, and the house you plan on buying isn't a stretch for your income, etc., then you should be OK. If you already were pushing your financial envelope with the car purchase, then maybe not.

[vxangelxv]

Hi, sorry, I should have given more information. We (husband and I) want to buy in Nevada, Clark county. Our Fico scores are 630 hoping to raise them by paying off some credit cards. We don't have any late payments on our CRs. Our minimum monthly credit card payments are 273.00 a month, and our new car payment is going to be 442.00 a month. We didn't put anything down when we bought the car, we used our trade in as the down payment. Our rent now is $990.00 a month. I've been here for 5 years, we both have had the same job for a year and have been in the same line of work for over 7 years. We plan on putting down 15-20 thousand down on a house. Our combined income is $56,000 a year. What do you think?

[ShanetheMortgageMan]

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vxangelxv wrote:
Hi, sorry, I should have given more information. We (husband and I) want to buy in Nevada, Clark county. Our Fico scores are 630 hoping to raise them by paying off some credit cards. We don't have any late payments on our CRs. Our minimum monthly credit card payments are 273.00 a month, and our new car payment is going to be 442.00 a month. We didn't put anything down when we bought the car, we used our trade in as the down payment. Our rent now is $990.00 a month. I've been here for 5 years, we both have had the same job for a year and have been in the same line of work for over 7 years. We plan on putting down 15-20 thousand down on a house. Our combined income is $56,000 a year. What do you think?

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Would also need to know what you are looking at in terms of your sales price range.  You can get a lot of good deals around Las Vegas for about $200k now.

[vxangelxv]

Hi, we are thinking about the 180-210,000 price range if possible. There are great deals out here right now, so hopefully we can make it happen.

Thanks!

Message Edited by vxangelxv on 05-05-2008 10:43 AM

[ShanetheMortgageMan]

$180k to $210k price range looks pretty reasonable for your situation.  At $180k, the debt to income ratio is a comfortable 43-44%... however at the $210k end, it goes up to about 48%, which may or may not get approved.  You'd want to get in touch with a loan officer to run your loan through automated underwriting to see what your max sales price/mortgage amount would be.

[vxangelxv]

Cool, thanks a lot! I actually feel a lot better now. Do you think we would have to wait a while since we just purchased a new car?

[ShanetheMortgageMan]

Nah, the fact that you have a new car/payment is just factored into the debt to income ratio.  Sure a new trade line on credit may hurt your scores for a few months, but your current scores are fine to obtain an FHA loan approval (which is what I'd recommend in your situation).

[vxangelxv]

Great! Thanks so much, I feel 100% better! Have a great day!

[ShanetheMortgageMan]

You are welcome, you too.