Refi auto loan before Mortgage app. Good or bad idea?

[westo12]

I plan on applying for a home loan around March/April 2013.  How would a lender view my app if I refinanced an auto loan 3-4 months before this app?  My score has improved over 100pts since I obtained my original auto loan and am thinking I could get a much better rate/lower monthly payment if I do so in a few months.

Anyone have any ideas/experience?

[indecison]

Do you think that your DTI ratio will be good even with the car loan as it is today? If your DTI is good as it is today I would wait until after the mortgage to refi. Your only talking about 3 to 4 months so your savings really isnt going to be that much over that time period by doing the refi now. Now if you dont think you can qualify without lowering the payement then it might make sense.

[westo12]

I am pretty sure my DTI will remain approx the same, but I think I can save between $100-$150/mo by refi'ing.  Which adds to the overall amount of house I can afford.   However, I do have a few 30 day auto lates that I think may hinder me from getting an approval, even if my scores are in the 660-680 range.  Just not sure on that.. 

[indecison]

At least with FHA those lates if they are within 12 months will most likely be a deal killer. You may want to try good willing those to see if they can be removed.

[westo12]

I know, my one yr mark with my most recent late is 3/2013.  Which is why I can't app until a couple months after then.  :/ Definitely sending GW's in the meantime tho.

[tooleman694]

I would do it if it was me.

[indecison]

I agree with toolman now knowing that your 12 month of no lates is not until 3/13.

[westo12]

@indecison wrote:

I agree with toolman now knowing that your 12 month of no lates is not until 3/13.

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Would or wouldn't do it?  

@indecison, you would do it, because the 12 months isn't until March?  Can you elaborate a little bit more please?

[cappucino24]

I did it and it lowered my DTI which was a good thing...If questioned by underwriting wouln't that be a easy explanation..better interest and lowering  monthly payment?

[indecison]

I would go for the refi. You may or may not be able to get the lates taken off so you have to assume you cannot close on a house until after the lates age to 12 months. If it were closer then you have to worry with your score dropping because of the inquirey and your AAOA going down. But being that far out you should not have an issue and you will save a good chunk of money by doing the refi.

Sorry for the confusing post. I had only been half into my cup of coffe.