Apartment or New Car

[boosie1979]

I wanted to know which would be better to get a new car first or my apartment. I  moved to a new state and living with a friend for about 1 1/2. I do not pay rent or anything.  I'm now looking for my own place. I have a good standing payment history with GMAC as I purchased my first car 10 yrs ago and rec'ed 1.9 financing.

Will a lender look at my current  bills or will apartment leaser consider car payment and other bills. My credit is now looking better since I joined eq 598 ex 644 trans 618. Salary around 35k. One secured credit card with cl 300 balance $43 which i pay monthly only put gas on it...Credit builder. A citifiancial loan $105 monthly about 6 more payments and looking at apartment around $700??

 I had 2 charge off that I recently pd about 6 months ago. Medical collections $720 which pd and waiting for the CA to remove as promsied should come off this month as they as 30 days. Everything else on time before time. I also belong to a CU which is the bank inside of my place of employment so kinda a family realtionship.... what should i expect for finacing % or best bet apartment or car first? thanks

[Anonymous]

Apartments don't care about your DTI. Apartments usually require a person to make 2 1/2 or 3 times the monthly rent after taxes and that will get you approved.

Apartments use your FICO score to decide how much $$ they want for security etc.

Also, if you buy a car it won't post to your credit report for at least 30 days....usually longer as it all depends on when that loan funds etc.

I'd say get the car first, then the apartment. Since your FICO really only matters with the car loan.

Message Edited by 1111mel on 06-14-2008 07:11 PM

[Anonymous]

Maybe wait for the CA to come off before you apply for the car. It might slightly raise your score and get you a better chance at a lower rate. You should be ok on the apartment though - you can go ahead and do that in the meantime.

[MattH]

Don't get a new car, get a used car, new cars are an expensive luxury for very prosperous people and a huge drain for most people.

[Anonymous]

Yes a new Used car...but if you wait till September you can get an '08 for that of a used '07 ONCE the '09's come out for the particular model.

[catzcradle]

Well, honestly, I'd wait a few months before doing either. Try to get all of your scores above 600 before applying for a car loan. With your scores right now, you'll probably get saddled with a yucky rate, like 12% or worse. Dealerships like to finance people above 600, and even more so, above 680.

Right now, I'd save the money each month you might put toward a car or an apartment and get yourself a very nice down payment. That makes the dealership happy and they can probably get you a better rate to finance.

Talk to your credit union also. Credit unions usually have better rates for auto loans than banks like Wachovia, but the best rates still apply to prime borrowers. You might get a 8 or 9% with your credit union, but your better off to just ask. Print out your reports and bring them in.

I applied for auto financing a few months ago: my scores a month ago were 640/657/670. I got approved for a 9.9% rate through the dealership. That was too high for me, so I got a few lates deleted with GW letters. My TU score went up 31 pts, so I'd assume the others went up also. Last week I got approved at 6.9% by myself with a 688 TU, but with a cosigner (FICO in the 800s) I qualified for a 2.9%.

Anyway, I'd work on getting everything about 600 first. Depending on which report they pull (and many pull all three) you'll probably fall into the "subprime" tier of borrowers.

And if you like your living situation, I'd stay there and buy the car first. At least with a vehicle, you have something of value at the end of the terms.

Good luck!

[shyboy]

I would get an apartment for now. A car is the worst investment to make but we all do it.

[MattH]

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@shyboy wrote:
I would get an apartment for now. A car is the worst investment to make but we all do it.

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As Dave Ramsey recently told a caller, "you're gonna destroy any car you drive, so you should destroy a 15 thousand dollar car instead of a 30 thousand dollar car," which is precisely why I'm currently driving a 2000 Camry that I bought in 2004.

[boosie1979]

Thanks everyone for all the advice. I'll keep saving to put more towards the car as the down payment and wait until all the collections are deleted as the ca stated and wait towards the end of the year to look at the purchase of another car unless I start having major trouble with the one I have. Thanks !!

[MattH]

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@boosie1979 wrote:

Thanks everyone for all the advice. I'll keep saving to put more towards the car as the down payment and wait until all the collections are deleted as the ca stated and wait towards the end of the year to look at the purchase of another car unless I start having major trouble with the one I have. Thanks !!

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Even if you do have major trouble with the car you have now, that does not always mean it needs to be replaced, that would depend on the nature of the problem. If the likely outcome is reliable transportation for another year, it can sometimes even make sense to spend more than the blue book value of a clunker so as to postpone replacing it.