topic Taking an auto loan before trying for a mortgage in Mortgage Loans

Taking an auto loan before trying for a mortgage

valley_man0505 — Wed, 31 Dec 2008 17:14:48 GMT

I am planning to buy a house using an FHA loan somewhere around March-June. I have been working at getting my credit cleaned up and it should be where it needs to be by then (although I hear it is hard even for people with good credit to get loans right now). However, my truck is been a maintenance nightmare lately and I really want to try to trade it in to get a more reliable one. Would taking an auto loan before trying for a mortgage hurt my chances at the mortgage?

Re: Taking an auto loan before trying for a mortgage

Anonymous — Wed, 31 Dec 2008 17:22:49 GMT

No. The payment however will be calculated into figuring out how much house you can afford.

Whatever points you lose by opening a new car loan usually (or several times in my case) was rebounded within 5 months of consistent payment history.

Re: Taking an auto loan before trying for a mortgage

DallasLoanGuy — Wed, 31 Dec 2008 18:11:19 GMT

most people dont need to worry about a new inquiry and trade line.

people with very low scores or super high debt ratios need to worry.

really, unless you have been pre-approved already or can supply us with more info, we cant guide you too much

Re: Taking an auto loan before trying for a mortgage

valley_man0505 — Fri, 02 Jan 2009 02:29:22 GMT

Dallas, my debt-to-income would be fine. I am in the process of re-establishing my credit as I had a lot of CO's that occured when some things outside of my control happened about 6 years ago. I have since paid some of them off. I have 3 CC's now that are approaching the 6-month old mark and another that is about 1.5 years old. I also have some student loans that are about 4 years old. None of these items have been late once. I also have a 2+ year old auto loan for a vehicle that is in my ex-wife's possession (I agreed to pay it off as part of the divorce)--this loan balance is now less than $1000 and will be at $0 in less than 3 months. I am expecting my scores to be in the low-to-mid 600's or higher within the next 1-2 months once a wave of deletions take place (I PFD'd about 10 med collections and had a judgment dismissed). More or less, my credit will be very good in about 2 years when most of my derogs will have dropped off. Now, though, they are still haunting me even though they are old. I am moving up fast though. As for the auto loan itself, I would not plan on buying anything for more than $10K right now--just something to get me through the next year until I can qualify for something nicer.