topic Re: Auto Loan lenders with no DTI limit or highest DTI limits? in Auto Loans

Auto Loan lenders with no DTI limit or highest DTI limits?

Joleybear — Mon, 31 Jan 2022 04:12:05 GMT

I have no issues covering my current bills and paid off all of my credit cards recently. I was paying hundreds per month so eventually I would like to buy my first car, putting what previously went to credit cards towards a car payment, if that makes sense. I've never owned one before and I'm 31. Yes, 31. lol. I just never felt the need to drive. We're also buying a house soon. How hard is it to buy a house and then a car shortly after (maybe 1 year later?). What lenders are the most lenient with DTI? I'm interested in the Toyota Sienna right now because we have children and it looks roomy ish. How different is auto loan credit scoring from mortgage scoring? What score is most commonly used? Thank you for any information.

Re: Auto Loan lenders with no DTI limit or highest DTI limits?

redE2move — Mon, 31 Jan 2022 06:24:42 GMT

House 1st then the car. We applied for a car loan the day after closing. We moved further out and a second vehicle was mandatory. Instant approval from our credit union with a rate of 3.89%. Let nothing hinder getting you into the home. You'd want to prevent any major changes in your DTI before going to closing as this could get your loan rejected if they pull again just before closing.

Re: Auto Loan lenders with no DTI limit or highest DTI limits?

Joleybear — Mon, 31 Jan 2022 17:58:27 GMT

Thank you for the advice. Yes, I figured maybe a mortgage was harder to get so I plan to hold off on anything until after. We have almost no payments of any kind right now so it's a clean slate when we apply for our mortgage.

Re: Auto Loan lenders with no DTI limit or highest DTI limits?

Harvey26 — Thu, 03 Feb 2022 21:33:28 GMT

@Joleybear I would say hold off on car until you close on home. But life happens and if for some odd reason you need a car before then reach out to your loan officer so they know. For instance my car recently went out after I applied for preapproval and my LO was perfectly fine with me running my credit as long as my payment did not exceed where it is currently. Best of Luck!

Re: Auto Loan lenders with no DTI limit or highest DTI limits?

SouthernCredit — Thu, 10 Feb 2022 05:57:28 GMT

While it is always better to have that clean slate when applying for a mortgage, what you really want is to make sure your DTI with whatever your car payment would be is accounted for. If you're leaving off debt trying to play the mortgage application, you're doing yourself no favors. The whole point of the means test is to make sure you are in a financial position to manage your debts. If you're waiting to show a car payment to push your mortgage through, then you probably shouldn't be buying that house in the first place.

I just bought a car on 9/28 and closed on another house on 11/30. There's nothing wrong with buying a car before you buy a house, but your profile has to support it. If you need a car, and you can pass the means test for the house with the car on your report, no reason not to buy whenever you get ready. If you can't pass the means test with an auto loan on your report, might be time to re-evaluate.

Re: Auto Loan lenders with no DTI limit or highest DTI limits?

Joleybear — Fri, 25 Feb 2022 16:18:18 GMT

With all due respect, I'm intelligent enough to know what I can budget and DTI is ridiculous imo. I've had far more than 50% of my DTI in payments in the past without any issues. Even when someone lost their employment we figured everything out. I've never been in a position where I was even late on rent. I depend on myself to decide my financial limits, not a loan officer. I pay $2,000 plus laundry right now to rent an apartment. I don't qualify for anywhere near that for a mortgage, I'm pretty sure. I also did that when I had a lot of credit debt still. I am at $0 now. We've lived here for years. That's actually why we want to purchase - it's cheaper than renting. I get that it helps some people, but not everyone needs that and some people know their own limits.

Re: Auto Loan lenders with no DTI limit or highest DTI limits?

CCrew — Fri, 25 Feb 2022 17:25:05 GMT

@Joleybear wrote:
With all due respect, I'm intelligent enough to know what I can budget and DTI is ridiculous imo. I've had far more than 50% of my DTI in payments in the past without any issues. Even when someone lost their employment we figured everything out. I've never been in a position where I was even late on rent. I depend on myself to decide my financial limits, not a loan officer. I pay $2,000 plus laundry right now to rent an apartment. I don't qualify for anywhere near that for a mortgage, I'm pretty sure. I also did that when I had a lot of credit debt still. I am at $0 now. We've lived here for years. That's actually why we want to purchase - it's cheaper than renting. I get that it helps some people, but not everyone needs that and some people know their own limits.

Realistically though, in underwriting it's not about what works for you as a person, it is simply what a person with a similar profile performs like. If 60% default whether you do or not then you're lumped in with the risks. They're not picking on you directly :-)

Just like for the life of me I can't figure out why my wife's FICO is near 800 and mines closer to 700, when all the income is mine and all the bills paid the same. Heck, she doesn't even have an employer and hasn't for 30 years. Go figure.

Re: Auto Loan lenders with no DTI limit or highest DTI limits?

disdreamin — Fri, 25 Feb 2022 18:44:35 GMT

@Joleybear wrote:
With all due respect, I'm intelligent enough to know what I can budget and DTI is ridiculous imo. I've had far more than 50% of my DTI in payments in the past without any issues. Even when someone lost their employment we figured everything out. I've never been in a position where I was even late on rent. I depend on myself to decide my financial limits, not a loan officer. I pay $2,000 plus laundry right now to rent an apartment. I don't qualify for anywhere near that for a mortgage, I'm pretty sure. I also did that when I had a lot of credit debt still. I am at $0 now. We've lived here for years. That's actually why we want to purchase - it's cheaper than renting. I get that it helps some people, but not everyone needs that and some people know their own limits.

I was looking back through old posts, and last month you said your rent was $1500 plus utilities. Is it $1500 and $500 in utilities for a total of the $2k you mentioned in your post here? You've also posted about trying to goodwill an account that went to collections from 2016 when your SO was laid off, I believe. You might not have been late on your rent, but you let a credit account go to collections which makes your statement about having figured everything out an interesting one.

You might find DTI limits ridiculous, but it's all about the numbers and what is statistically reasonable risk for lenders. You might not like it, but you'll have to play the game if you want the loans.