Frequent Contributor
Posts: 382
Registered: ‎06-26-2012
Re: Will an auto loan help or hurt me?

If your looking to get a mortgage, don't buy a new car unless you NEED to without a doubt, and even then I'd say buy a used car cash and/or a bus pass first.


Even if you make 100k a year and the house is only 100k, that DTI is a real bitch. But also they go back several months and look at your bank statements and they want to see as much money in reserves as possible.


If your car craps out, you could buy a used car that will last long enough cash for the same amount as a down payment on a new car, but then you don't even mess with your DTI ratio plus every month between now and when you close, you won't be paying a car bill which means a higher bank account balance which looks better than not.


Any mortgage lender will tell you not to make any big purchases within 6 months of apping for a mortgage because of the initial drop in score, as well as it affecting your savings and DTI ratio.


I'd go for the mortgage first then once you have it buy the car - save that money and put it towards the down payment on the house not the car as interest on a house is FAR more expensive in the long haul than a car.

Current: Eq- 624 Ex - 631 (lender pulled) TU - 661 (lender pulled)
Goal 700+ across all three