topic Re: Spouse needs a car. Should I refinance mine first? in Auto Loans

Spouse needs a car. Should I refinance mine first?

Anonymous — Thu, 05 Mar 2020 16:34:57 GMT

I'll make this as short as possible.

I recently was approved by Payoff.com for a $20,000 loan to pay off our credit card debt February 5th. My scores have since shot up. Auto scores are 711-736-745. My husband recently, for only God knows why, missed 4 credit card payments(his name only) and was over his $300 limit by $98. (I know I know) His scored of course tanked from 698+ to 542's.

Now, his current car has stopped working and we have to get another one. When the numbers boiled down it just makes sense for us to get him a new car. My car note is $467 and we can comfortably afford another car note up to $300.

My questions are:

1. If I were to refinance my car should I do it BEFORE we apply for a loan for him? Is it even a good idea?

2. Should he be the co-signer on the new loan? Will his score negatively affect the interest rate? We are going through our Credit Union.

Re: Spouse needs a car. Should I refinance mine first?

pinkandgrey — Thu, 05 Mar 2020 19:03:31 GMT

In order to get the best rate on the new car loan, you should probably put it in your name. If you don't want to be the only owner, then he could take the loan in his name and YOU would be the cosigner. That would help bring the rates down.

Unless you need to do so, I wouldn't refinance your current car for awhile. If you do want to try to refinance it though, I would wait until AFTER securing your husband's new car.

Good luck!

Re: Spouse needs a car. Should I refinance mine first?

Anonymous — Thu, 05 Mar 2020 19:34:46 GMT

Thanks for replying!

that's one of the things I've been confused on is whether I should be the co-signer or he should. Or he shouldn't be included at all.

and my auto loan is for a 2016 I bought new with a 8.9% interest rate (my score since greatly improved) and I have 39 months left.

I'll hold off on a refi until the new loan is secured.

Re: Spouse needs a car. Should I refinance mine first?

sccredit — Thu, 05 Mar 2020 21:18:16 GMT

If you go through the dealer for financing they will put you on line 1 and him on line 2. That would make you the primary buyer and that is how they would price the loan.

Re: Spouse needs a car. Should I refinance mine first?

pinkandgrey — Thu, 05 Mar 2020 23:19:31 GMT

@sccredit wrote:
If you go through the dealer for financing they will put you on line 1 and him on line 2. That would make you the primary buyer and that is how they would price the loan.

Well, there's usually some flexibility. When I got my first car, I had no credit. My dad was the COsigner in the scenario.

Just check with the lender. No matter who's the signer and who's the cosigner, responsible payments will improve both of your credit scores. So I would just go with whatever gets you the best rate.

Good luck!

Re: Spouse needs a car. Should I refinance mine first?

Anonymous — Sun, 08 Mar 2020 15:34:49 GMT

I think I've seen @Brian_Earl_Spilner comment on threads like this before with insight earned by working in auto lending...

Re: Spouse needs a car. Should I refinance mine first?

Brian_Earl_Spilner — Sun, 08 Mar 2020 23:42:02 GMT

Problem with refinancing beforehand is you'll take scoring penalties for the new loan. If you're planning to do both through say, your personal credit union, they can handle both at the same time as they are fully aware of the situation and the score changes. If you're planning on shopping around, I'd secure the new loan first.

As for putting him on the loan, or vice versa, really depends on how you handle your finances. If your money is pooled, you're going to want the best rate since it financially affects you. If your finances are separate, it won't matter for the most part. To get the best rate, he'd have to be left off the loan. You'd add him for income if yours couldn't support both payments or DTI was tight.

Problem is, if you live in a state that requires the person to be on the title to do anything with it, he'll have to be on the loan. Examples would be dealing with the DMV or even just speaking to the lienholder.