Re: looking to finance a vehicle.[ Edited ]
01-28-2013 05:00 AM - edited 01-28-2013 05:00 AM
Qualifying for a mortgage is not only income dependant but also dependant upon your actual ratio's which consists of the debt (both front and back end).
Hmmmm... I'm not so sure leasing a vehicle is worse as you have a lower monthly payment plus you are only financing the use of the car over 12-36 months, not the full purchase price of the vehicle. My auto lease actually improved my DTI for my mortgage. As if I financed, my monthly payment would have been $150 more plus I would have $35K total debt on my credit report versus the $18K I currently have for the lease. The other nice thing about a lease, is you have minimal maintenance as you don't have to worry about the crap that starts breaking at 100K miles...been there done that. So if you can't qualify for a mortgage with your credit, getting an auto loan would help your credit score. In fact, it was an auto loan after BK that really boosted my scores. As for qualifying for less house, as others said, that is income dependent. I make $96K a year and still got preapproved for more house ($360K) than I needed with a $536 per month lease payment on a luxury sedan. YMMV
If the OP leases a vehicle and it is too much vehicle for his income, then he has to do more than just buy out the lease, he has to purchase the vehicle. I have had customers of mine that had to go through this when they had leased a vehicle first, before buying a house and their payments were too high to support both the house and the vehicle(s) payments. It creats a real mess, that's why I said "worse". If, however, the OP is buying a vehicle well within his ratios then it doesn't matter from the mortgage perspective if he leases or buys. There are other items to consider.
Many first time home buyers don't keep in mind their back end ratio when looking to acquire a vehicle. That was my point.