Mortgage Loans

[Clyons0203]

Im looking to buy a lightly used car.  Probably an 04 -06 model to avoid that killer first year depreciation.  I am a recent college grad with a good stable job.  I'm not looking to buy a home yet, maybe in the next year or so.

I dont have any dept accept 19k in school loans.  No credit card debt!!  Due to some bad credit behavior back in 2002 my credit score is 590.  I have paid my credit cards off, got some bad items removed, and sent out some PFD and GW letters.  So my score should jump up to around 610 maybe more.

Im not looking to buy until the beginning of Sept.  I know what kind of car I want, but dont know what type of loan amount I would qualify for.

My salary is 42k a year.  Ive looked at cars that cost from 22k - 35k.  Just not sure on what I can afford.  So what do u guys think?

Message Edited by Clyons0203 on 07-19-2007 06:16 PM

[Eagle1]

You don't have a lot of debt? 19k is a lot of debt. Add the car your talking about and your near 50k. Your decision should be governed by the home purchase that you plan on in a year or 2. The 19k student loan + a large monthly car payment will substantially reduce the amount of mortgage lending you will qualify for. 22 to 35k is excessive for a used car - these are new car prices. Your scores would likely translate high interest on top of the 35k. I bought a used 2005 SUV low mileage for 16k on memorial day. Depreciation should be the least of your worry, not many cars see 3rd owners. The mistake most people make is shopping for the kind of car they want instead of the kind their situation should allow. Don't seek or plan a car purchase by what you qualify for, they will take full advantage of that. Go in there with a set amount that you will spend, then spend even less than that. Purchase on a holiday special or during very bad weather. Don't tell them your credit stinks or your not sure if you qualify. A dealer will qualify you. Good Luck my friend! Get your dream car after you get your home.

[javi84]

If your buying a home in the next year or so then you ARE looking to buy a home. I say buy a $5-10K car, it should last you long enough then save as much as you can on the down payment for the house. Car debt = bad debt while real estate debt can = good debt.

[MidnightVoice]

Buy a 2-4 year old Toyota Corolla 

[powerup]

I am with Midnight. Go for a cheap car that will last a long time.

[Tuscani]

HYUNDAI!!!

[ilovepizza]

Can I ask this? How much money are you left over with going in to savings every month? If you have nothing left over, their isn't much you can afford.

If it were me, I'd not spend more than $9,600 based on what you wrote unless you have a good vehicle now. If you have a good vehicle I would definitely not buy anything.

($9,600+int / 3-4 yr loan max for a vehicle 2-3 years old)

I personally would focus on your student loan first. It's easier to pay debt when you have money now. You will have many expenses later.

Check autotrader.com or carmax.com to see what is in your price range.

[FICO_Focused]

Car should always cost less after TTL than half of your NET income... SO by my estimation $42k equals $34k NET total car debt shouldn't be more than $15k.

Rob

[courtney091082]

I am no expert, but I would say if you are looking to spend that kind of money on a car, why are you looking into a used car?  I would honestly at least get one under warranty.  I have to agree with the folks saying find a cheaper car.  I have a Honda, and I love it!

[Jontevius]

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courtney091082 wrote:

I am no expert, but I would say if you are looking to spend that kind of money on a car, why are you looking into a used car?  I would honestly at least get one under warranty.  I have to agree with the folks saying find a cheaper car.  I have a Honda, and I love it!

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hondas aren't cheap lol