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StartingOver10
Posts: 3,831
Registered: ‎03-06-2010
Re: looking to finance a vehicle.
[ Edited ]

No, the auto loan won't help with a house loan. In fact, it affects your DTI directly - dollar for dollar in some cases.

 

If you go into a mortgage lender without an auto loan they *assume* you will never have one and won't input one into your file. If you do have an auto loan, they assume you always will have an auto loan and use the monthly payment in your back end ratio. If the auto loan is large enough or the monthly income small enough, then the auto payment can actually reduce the amount of house payment for which you are qualified. I have seen some families actually not be able to buy because they have two huge auto loans eat up what would be the allowable mortgage payment.

 

So if you can possibly work it out, get the house before you purchase any vehicle with a payment. (And leasing a vehicle is worse.)