Just traded a car and now need a home loan. How bad will it be?

[Anonymous]

I bought a convertible 4 years ago with no children in sight.  Two years later the surprise baby came.  I tried to hang on to the convertible for as long as I could but had to finally trade it in for a great deal on the desperately needed soccer mom SUV.  The car payment went down by $65 but of course I have a new balance of $24k for the new loan versus the $4k I had left on the convertible. This all transpired late last month. Yesterday a letter came saying my landlord needs to take their home back for a son moving back from college.  I would much rather take this opportunity to purchase a new home rather than rent another one to avoid two moving costs, the hassle of two moves, and not to mention avoiding the atrocious rents folks are charging these days.

How hard would it be to secure a mortgage with the newly acquired vehicle loan?  Anyone have any experience in this?  I had 755 EQ, 745 TU before this new loan and the three hard inquiries resulting from it.  It's too soon to pull my new scores right now as I'm sure the new loan hasn't hit the 3 bureaus yet but I have no clue how hard the impact will be. Any advice would be greatly appreciated.   

[tooleman694]

As long as your DTI is fine, you wont have an issue.

[Anonymous]

Very similar situation here.  We were planning a home purchase anyway this year, but about four months before we got started a clown smashed into and totaled my wife's car a couple payments before it was completely paid off.  We had to purchase a new one.  I'm sure someone can correct me if I am wrong, but I do not believe the amount owed on the vehicle matters.  All the lender will be concerned with is how much of your monthly income is dedicated to bills of any type.  It's not like credit card debit where utilization is factored in.

Everything sounds like it's in good order.  You should speak with a broker or loan officer to find out what your options are, but I think you will be just fine.  Congratulations too.  This is a great time to stop renting.

[JM-AM]

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@tooleman694 wrote:

As long as your DTI is fine, you wont have an issue.

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+1

If your DTI is okay based on your income and the price of the house is with in your income limits you will be fine. The only thing to add is if some one else is going to be on the loan they would also have to qualify.

[Anonymous]

Sincere thanks to all for the replies.  Fingers crossed!

[Anonymous]

ok let me tell you

i got a new car  two months before closing i email my LO and told him that i got a car

car price was 27k new and this is my 2 car on my name 

if you make $ they dont care 

[MovingForward_2012]

I also just got a brand new 2012 Acura at $35,700 but I am leasing so only $18,000 shows up on the credit report. My car broke down at the magical 100,000 miles and they wanted $2,000 to fix it. So I got a new car mid Nov. Next I apped for a Chase Freedom as I needed a third card to charge new furniture on a month before my bonus in March as my other two cards are used for everyday expenses. Broker said the new card was okay as long as I don't charge to it until after closing, which I planned to do anyway. I got two preapprovals: one in late Dec and one this month as I had to switch lenders. So I don't foresee you having problems especially with your great credit score. The only thing you will probably have to do is write letters of explanation for the recent inquiries.

[tooleman694]

There are always 2 big concerns about doing this

1. Will the new payment put your DTI out of wack

2. If your score is borderline, adding a new tradeline can drop your score

So in a nutshell, if you have a 640 score and a 49 percent DTI. you probably want to wait on the car.

[MovingForward_2012]

+1 If you have a score that is borderline qualifying for a mortgage, don't do what I said I did in my earlier post as it will probably disqualify you. You need credit score cushion to do all of that. OP has a 745 so I have no concerns about his new auto loan and I was pre qualified after the new auto lease account reported so no DTI issues.

[Anonymous]

Totally understand where you're coming from.  Do you know how many points you lost from the new vehicle loan and additional hard inquiry? I won't know until February and the suspense is killing me!