topic Should I refi my sub prime motorcycle loan? in Auto Loans

Should I refi my sub prime motorcycle loan?

Anonymous — Fri, 17 Jul 2020 23:45:32 GMT

So I'm a couple years into a subprime loan for harley. No late payments on it. The collections on my account are all hitting the 7 year mark over the next 6 months. My ficos are all mid 500's.

This loan is literally the only open account on my credit report of any kind (other than some of those collections showing open, for closed commenity cards).

Just this month I had to replace my son's car (another subprime) - so that's about to hit my report with zero paid off obviously.

My concern is if I refinance the motorcycle next spring (and the car), I will have these 2 open accounts plus a secured card I just got this week. The loans will both be brand new accounts with 100% balances, plus the secured card.

I'm concerned with a potential fico hit, as I'm looking to get a mortgage in a year. I'd rather pay more on the bike for the next 2 years, vs more on amortgage for 20x the amount for next 30 years LOL.

Thoughts on potential repercussions?

Side note: after my collections drop, I'm going to try to add the discover secured card (I was denied the prequal) to try get closer to the magic 3 number. That will be yet 1 more new account. So every open account on my report will be 1 year old max.

Re: Should I refi my sub prime motorcycle loan?

KLEXH25 — Sun, 19 Jul 2020 03:57:09 GMT

Can you postpone the mortgage app? If not, I agree that refinancing the cars 6 months before a mortgage is not a good idea. The drop in AoYA and AAoA, along with the score dings will hurt. Ideally, there should be no apps for a year before a mortgage.

Re: Should I refi my sub prime motorcycle loan?

Anonymous — Sun, 19 Jul 2020 17:20:13 GMT

yeah - I think I will just need to leave the loan as is.

I can hold off on the mortgage, my timeline is just personal desires. I rent a house from a friend who could no longer afford the mortgage after her divorce, but she can't afford the maintance/upkeep still and it is really starting to annoy me. Plus I always have this fear that she is one big bill away from getting behind on the mortgage - I don't want the sherriff to show up one day out of the blue to boot me (I have seen it happen to renters before who had no idea their landlord had let the house fall into foreclosure).

My plan for the mortage was to use a VA lender with no overlays, so I just need to make sure I can pass the automated UW. Everything else is just me trying to get out from my crazy high sub-prime payments on vehicles to free up a few hundred in my budget