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Posts: 560
Registered: ‎09-29-2012
Re: Auto Refinance Smart?

EyesofTexas wrote:

I am currently saving for a house and recently finally cracked the 700 barrier, 707 to be exact. I have only my truck as debt which is 14,000. I have had perfect payment history since I opened it back in Feb. 2009. My payment is 542/month.


I recently opened a checking and savings account with a credit union who pulled my credit as a part of their decision whether or not I could open the account. Once they pulled my credit info they offered me a better interest rate and lower monthly payment.  Its great news but I am concerned that opening a new account with my credit union will affect my credit score negatively. 


I plan on buying a house in April, but do not want to make any mistakes leading up to that can have dire consequences on my credit score.


So to sum it all up, is a auto refinance smart when Im considering buying a house within 6 months?


DTI ratio with a Refi might help, however, you might wanna think about the terms and how long the Refi will be.  You already had the loan for 45 months and with a Refi you might turn your Truck upside down by extending the life of the Loan(s).


You are thinking about getting mortgage shopping in 6 months.  I assume you have a nice down payment for closing costs etc ready?  To improve your DTI ratio, couldn't you use some of that down payment now to pay down the principle of your Truck and continue to save for your down payment in the next 6 months?


It is not usually advisable to be getting inquires and new credit soo close to mortgage shopping.