topic Re: Questions W/DCU in Auto Loans

Questions W/DCU

Jayriku — Fri, 13 Jun 2014 13:51:38 GMT

Hello Everyone, would love to keep this short. I applied with DCU for a autoloan for a used car. The loan amount was for 14k for a used car which I got approved for. I don't have any other loans and nothing bad on my credit report besides high balances like 80% ult. Was kinda shocked when I got approve for a 14k auto loan with a 9%. Thing is that the LTV is 80% which I don't understand. I visit this site daily but never created a account until today. I can't find anything about a ltv of 80%... everything I read is well above 100%. As of now I don't have any down payment money to put down until maybe August. Ive been putting big payments to my credit cards which drain my extra saving cash. I really need this car which is a used mazda3 for school and work. What should I do? My credit score is around 620-640. Credit ult is 80% should be way lower this upcoming months (3) max. Any help would be great. Also the car year is 2011. Thanks!!

Re: Questions W/DCU

Jayriku — Fri, 13 Jun 2014 15:45:58 GMT

Added*

Car loan approve for 14000 with 80% ltv.

Car is listed for 12995. Will talk the price down

Car is a Pre Owned Certified mazda 3 4 door 2011 with 30k miles

Buying from a Mazda Dealership.

Details about me -

22 years old , credit score is 620 -640.
I have 2 Credit Cards; One is Chase Freedom and a Capital One cash reward.
One secured credit card with Capital One and one JCP Store Card.

-------
My real question is can I even get a loan without a down payment? Also a answer to the DCU LTV 80% Question posted in the OP. One more thing too, I heard the dealership might be a great place to go. Not sure xD as always thanks. Also if you need more answers just ask and ill post them here asap.

Re: Questions W/DCU

Remember0 — Fri, 13 Jun 2014 22:33:55 GMT

AAoA:

Income:

Employed Full time or part time?

Lenght of Employment:

Previous Loan Experience:

Rent/Mortgage:

Aggregate Minimum Payments of Credit Cards:

Please list credit cards balance/credit limit individually:

If they only approved you for 80% LTV, you'd need 20% down I'm guessing. You can call and ask.

Any baddies OTHER than the high util?

The good news is plenty of other places exist where you hopefully won't need a down payment. Can you by any chance paydown your cards such that all but 1 report a 0 balance on their statement. And the 1 that has a non-zero balance should have a balance less than 10% of its limit.

If your only "baddie" is high util, then getting it down to even 30% will cause a HUGE increase in your score esp. if all cards except 1 report 0. The only issue is you'd have to wait to apply to more banks till your reports reflect the new balances (your reports update AFTER your next statement with the lower balance cuts). Can you wait to buy the car?

Re: Questions W/DCU

Jayriku — Fri, 13 Jun 2014 22:55:49 GMT

AAoA: 2 years
Income: 3000$
Full time
New Job started January 1099 employment.
Prior to that was 2 years but only made 15k a year.
None
Rent : 500$
Capital one cash rewards 2500 /2500
Capital one secured 300/300
Chase Freedom 150/1000
JCP Card 195/500

No late payments or any baddies no other loans at all.
Im paying them down 2x each months. Making payments in the 400s total. Also I need the car right away maybe within this month my car is dying very quickly. Just last month I put 700$ in it. Now I need another 1000+ repair. Its not worth the money and turn to repair it.

So about the 80% ltv will require a big down payment huh?

Re: Questions W/DCU

Remember0 — Fri, 13 Jun 2014 23:16:53 GMT

1) For the 1099 income do you have some kind of proof of income such as a paystub? Alternatively 3 months of bank statements will work (please tell me you deposit the money into a checking account before spending it)?

2) Call DCU and ask, but from what I know about the term LTV, yes 80% means you'll have to bring enough cash such that the loan amount is not more than 80% of the car's NADA Retail Value.

If you need a car ASAP, here's my advice. And I do agree that spending money on a car that is a bottomless pit is useless. Go to the dealer (negotiate the car price online first). They'll get you financed...but try to keep the rate lower than your DCU rate. Don't tell them about the 80% thing. Just I got approved for 8% from my CU, but I want less hassles and to go through you can you beat it. IMO they should be able to with no down payment required. If they can't beat 8% but come back with 10% or something, you can use a BS excuse like you've never really liked the customer support of the CU and just go with their financing anyways.

Then come home. Work on paying down the debt. In fact if you can, next month start by paying off the Cap One secured and JCP card if you can (other cards you pay only 1.5x min pmts)...really should pay 2x min to each card, but 1.5x works in a pinch. But after 1.5x min to each card, send the extra money you have that month with a focus on getting cards to 0 first. I know I usually recommend you pay off highest APR first, but having some cards report 0 will really help your FICO.

In a month or two, you'll hopefully be able to refi the loan as your FICO should go to 700+ if those cards get paid down. But one caveat: for refi you maybe underwater (ie owe more than car is worth). Look up NADA Clean Retail Value on the car...that's what lenders will use when refiing to see if you're underwater. There's a chance you'll have to come up with cash to refi if underwater, but if you're underwater by only 1k or 2k, you should be able to get through without any issue.

Try to bargain a good price on the car (over the internet)! Because the closer you can get out-the-door/financed price to NADA Clean Retail, the easier it'll be to refi 2-3 months down the road (and if it's lower than NADA Clean Retail, great...try to get it even lower ). My tip: don't buy any extras like gap, life insr, warranty from the dealer...if you want gap, get it through your auto insurance provider. It's usually MUCH cheaper than the dealer. Here's my guide on how not to get ripped off when buying the car...I recommend you read it (you can skip the leasing section though):

http://ficoforums.myfico.com/t5/Auto-Loans/Guide-to-Financing-Leasing-and-Refinancing-a-Car/td-p/2898720

Re: Questions W/DCU

Jayriku — Fri, 13 Jun 2014 23:24:59 GMT

Yes I do get biweekly paychecks and I do have a checking account with Chase Bank. Also I do deposit them into that account.

Also about the NADA; The Mazda 3 2011 4door auto clean retail is 14k but the car is selling for 12.9k. Unless you mean the clean trade in?? Which is 11.9k

Im going to dealership tmrw and will see what they can do

Re: Questions W/DCU

Remember0 — Fri, 13 Jun 2014 23:30:39 GMT

Awesome! So if they ask, feel free to give them the paystubs (and bank statements if they really want) as income verification documents.

Well when you refi most banks use Clean Retail haha. Try to keep out-the-door, final price under clean retail. Seems like the car's already under clean retail, which defintiely helps you. Still you ought to negotiate the best you can! Remember a dollar saved is a dollar earned. But yes, since you're already under clean retail, refi'ing will be easier for you in 3-6 months once those CCs are paid down a bit (and even with taxes, title, and license I doubt you'll end up much above even if you do NO negotiating).

To be honest I'm surprised you're seeing a CPO car for under clean retail before you even start negotiating. I'd say you've probably found a good deal unless there's some catch I don't know of or something.

Re: Questions W/DCU

Jayriku — Fri, 13 Jun 2014 23:45:03 GMT

Sounds great to me; Thanks! Sorry about the text and spelling being on a smart phone is deadly on the Forums.

So I can understand the LTV; will always be Nada clean retail amount for used cars? What I really don't understand is at what % ltv will it cover the whole car sale with TTL?

Re: Questions W/DCU

Jayriku — Sat, 14 Jun 2014 00:01:44 GMT

I will check out the Car and test drive it. Yeah because its under the clean retail nada value which is a first. The other cars are well above it by a few 100s

Re: Questions W/DCU

Jayriku — Sat, 14 Jun 2014 00:04:14 GMT

In my area not at the same dealer xD

Re: Questions W/DCU

Remember0 — Sat, 14 Jun 2014 00:47:41 GMT

"will always be Nada clean retail amount for used cars?"

Are you asking if they always use clean retail as the basis for LTV and for refis? If so most financial institutions do, yes, but not all. I'm pretty sure DCU is one of those that do use NADA Clean Retail. You really should call and ask DCU for questions specific to them.

"What I really don't understand is at what % ltv will it cover the whole car sale with TTL?"

Depends on final price and what TTL is in your area. Let me give you an exmaple in my state.

NADA Clean Retail = 14k

Car Price = 12k+200 (doc fees)

Taxes = .06*12.2k = 732

Title + License = $200

Total Car OTD Price = 12k+200(doc)+732(tax)+200(title+license) = 13132

If you borrow 13132, the LTV is 13132/14000 = 93.8%. So you'd need a loan that allows you to borrow up to 94% LTV. If it only allowed 80% LTV, you'd have to come up with 13132(purch price)-.8*14000(NADA Clean retail)= $1932 as a down payment.

Again this is how it typically works. I'm not sure if DCU means something else if they say 80% LTV, really you should call them on Monday when they open if the dealer doesn't finance you at a lower rate. Something tells me though that the dealer is going to be able to beat DCU's rate and won't require a down payment making this whole issue a moot point.

Re: Questions W/DCU

aubie1kenobie2 — Wed, 18 Jun 2014 21:40:21 GMT

Is this your first auto loan? I know a rep from DCU mentioned this to me (first time car buyer program) where they require 20% DP and would only finance 80%. In my case though, they approved for 125% of the amount I requested. Guess it's a YMMV thing.

Re: Questions W/DCU

beachdudede — Sun, 22 Jun 2014 00:41:11 GMT

I was approved for a car loan this week by DCU and did not have an LTV or a downpayment requirement. I was given an amount I could borrow up to, $14,500. If I wanted a more expensive car than that, I had to come up with the money myself (I did put 10% down to go a bit over the limit for the car I wanted and to reduce my monthly payment).

It was not that I could buy a car for up to $14,500 and had to put 20%, or $2,900 down.