Approval??

[krickyk]

I'm new to posting but am looking for advice on my chances on financing a car and what I should do to maximize my chances. Either a downpayment or paying off some cards but I can't do both.

My current car is paid off and on the verge of dying (it has a burnt valve and is not worth the repair). I am expecting to start a new job in the next 2 weeks that requires travel, so I need a car. I also have 3 kids under 3, so I really need a minivan.

Some info:

• Very high credit utilization, around 83% of limits (just finished law school and the bar exam, so there was a time I was living on the cards).
• Not a single late payment on any account on any credit report. No collections.
• FICOS: TU 698; EQ 626 (same info, no idea why the difference); EX FACO 701
• 2 previous auto loans, both paid on time and in full. Both paid off early. Last car loan was for my current car and my CU refinanced me at 7.4% in 2006.
• New to job. Need to purchase car before I even get a first payment. Annual income will be 49,000 gross (6000 of which is a nontaxable "car allowance" for travel.
• DTI = around 26% of my monthly gross income and that's including the full mortgage payment that is soley in my husband's name.
• Length of history 13 years. Average age is 4 years.
• All student loans in deferment for several more months.
• No mortgage on CRs. Have student loans, multiple CCs, and an unsecured loan (home improvement).
• Seems my utilization is killing my score. Fico Simulator puts my score under "best scenario" between 721 and 792 depending on on whether I test TU or EQ.

The car I"m looking at is a used Grand Caravan. A 2008-2010 model with about 33k miles, which have been priced at most at 19,000. I will trade in my current 04 Dodge Neon, but not sure I'll get much for it.

If anyone needs more info, let me know.

Just want to know my chances and whether I should use the cash I have in savings to pay down some cards or as a downpayment. I probably can come up with 1500.

Thanks.

[krickyk]

Any comment on my chances and advice on whether I should use the cash I have for a downpayment or to cut my utilization a bit?

[Anonymous]

I would hold onto the cash for the DP. 1500 is not going to make a real dent in that amount of utilization, especially enough to affect that aspect of your credit score. It is however almost 10% down on the loan assuming you get something for your trade in. The brand new job is probably going to be a problem but not necessarily one you can't overcome.

If all else fails maybe husband can be primary on the loan, but I would approach your bank or the dealer finance guy first and see where you stand and what they can do.

[Anonymous]

Hi- when some people come here for advice, their situtation may be so atypical and their circumstance so specific it makes giving any advice very hard to do.

In your situation, although you have provided much information I think we would need 3 times as much info and even then no one here could tell you either way- you have too many parameters working for/against you.

You would benefit more by actually making an appointment with your credit union loan officer and talking to them with your spouse, or seeing a car deaelrship fianance guy with spouse in tow and seeing how they would suggest structuring a deal.

If you have a job contract with your new employer that will also be necessary to bring along in both cases.

[kjm79]

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@Anonymous wrote:

Hi- when some people come here for advice, their situtation may be so atypical and their circumstance so specific it makes giving any advice very hard to do.

In your situation, although you have provided much information I think we would need 3 times as much info and even then no one here could tell you either way- you have too many parameters working for/against you.

You would benefit more by actually making an appointment with your credit union loan officer and talking to them with your spouse, or seeing a car deaelrship fianance guy with spouse in tow and seeing how they would suggest structuring a deal.

If you have a job contract with your new employer that will also be necessary to bring along in both cases.

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+1 - Some people will say pay down your card to lower your util as it will not only give you more favorable DTI in the eyes of a lender but it will give you higher scores which in turn gives you better financing terms with a lower payment most likely. 

Others will tell you, save it for the down payment to lower your payment. 

Best thing to do is definitely talk with your potential lenders and see what the best route for your specific situation and scores would be.