Chances of NFCU Approval with larger downpayment?

[Anonymous]

Hello:

I got knocked on my rear and ended up having to go on disability for a couple years.  At that time I ended up destroying my credit for the most part, however, I did manage to hold on to 3 credit cards , my first card - Discover It Chrome ($1750), a Capital One QS ($3000), and a Capital One QS1 ($1500).  I now have had NFCU as my main bank account for well over a year, have a $500 nRewards card, and added a Self loan for $500 that is about 60% paid off and the Self credit card.  I used some money I had gotten recently to take my utilization down from 100% pretty much down to 80%, and will be bringing it down another notch next week to probably 60-70%. I have however three or four old charge off accounts still listed, and several collection accounts that are wrecking havoc on my score  I do know that my TU score was at 572 recently, so I believe iy should have gone up a little more after bringing utilization down some. 

I am about to go back to work.  Thank G-d!!!!  I will be able to finally start tackling both utiization and working on my collections.  But to do so, I MUST buy a vehicle.  I don't currenty have one, and I live way far out in a very rural area.  My income from disability plus part time work is comes out to around $25,000k/yr, half of which is non-taxable, and my living expenses other than debt listed above is zero (no rent/utlitities/cell phone bill).  Capital One Auto Navigator prequalified me up to $38,000 - which is ridiculous I'd never spend that much. My parents have decided to help me get a vehicle and are giving me their 2nd and 3rd stimulus check money, so that is $4000, and I had put aside my stimulus funds too but will need a good chunk of that for insurance, tags, etc.    I am flying to Texas in a couple weeks to pick out the vehicle.  Looking for a (hopefully) Subaru because of them being excellent vehicles that hold value pretty well, and considering let's say $5,000 down payment, I am wondering if NFCU would approve me for the car loan if the vehicle price is between $10,000 to $13,000.  Will also be getting another $3000 a couple weeks after the trip, and am planning on telling NFCU I will be paying that on the loan as well when I get it (was supposed to come earlier than it is, hence the date of the trip, but have found out it will be delayed).  

Any other suggestions I'd be happy to hear as well.  I *cannot* take the cash and buy a clunker vehicle, so while I do see and agree with the logic on that, it's not feasible as I will need to commute 50-60 miles each way every day to work and will have to have reliable transportation, as well as my parents have flat out told me they won't kick in their $4k unless I get a vehicle that will be a "good" car and a whole list of other prerequisites about it being under 100k mileage, etc., etc., etc.

Thanks!

[Anonymous]

So...you have $5k and are getting another $3k. You don't feel you can purchase a "good" car for $8k cash?  I'm pretty sure you could.  Your interest rate on a vehicle loan is going to, most likely, be very high (I noticed you left that part out of the CapOne prequal info). 

And just curious, why the necessity to fly somewhere to buy a car (and then presumably incur the expenses of driving it back home)?  That's more money that could be put towards a car if you just purchased local. 

[Anonymous]

I guess, I'm curious about why you care who the lender is? Personally,  I  rate shop and go with the lowest rate. But as previously mentioned, you can get a good car for the cash you have.

If I were returning to the labor market, I'd  probably spend $6k on a "good enough" car and save some for a rainy day. 

also congrats on the new gig and really great of your parents to support you in this way. 

[Anonymous]

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@Anonymous wrote:

Hello:

I got knocked on my rear and ended up having to go on disability for a couple years.  At that time I ended up destroying my credit for the most part, however, I did manage to hold on to 3 credit cards , my first card - Discover It Chrome ($1750), a Capital One QS ($3000), and a Capital One QS1 ($1500).  I now have had NFCU as my main bank account for well over a year, have a $500 nRewards card, and added a Self loan for $500 that is about 60% paid off and the Self credit card.  I used some money I had gotten recently to take my utilization down from 100% pretty much down to 80%, and will be bringing it down another notch next week to probably 60-70%. I have however three or four old charge off accounts still listed, and several collection accounts that are wrecking havoc on my score  I do know that my TU score was at 572 recently, so I believe iy should have gone up a little more after bringing utilization down some. 

I am about to go back to work.  Thank G-d!!!!  I will be able to finally start tackling both utiization and working on my collections.  But to do so, I MUST buy a vehicle.  I don't currenty have one, and I live way far out in a very rural area.  My income from disability plus part time work is comes out to around $25,000k/yr, half of which is non-taxable, and my living expenses other than debt listed above is zero (no rent/utlitities/cell phone bill).  Capital One Auto Navigator prequalified me up to $38,000 - which is ridiculous I'd never spend that much. My parents have decided to help me get a vehicle and are giving me their 2nd and 3rd stimulus check money, so that is $4000, and I had put aside my stimulus funds too but will need a good chunk of that for insurance, tags, etc.    I am flying to Texas in a couple weeks to pick out the vehicle.  Looking for a (hopefully) Subaru because of them being excellent vehicles that hold value pretty well, and considering let's say $5,000 down payment, I am wondering if NFCU would approve me for the car loan if the vehicle price is between $10,000 to $13,000.  Will also be getting another $3000 a couple weeks after the trip, and am planning on telling NFCU I will be paying that on the loan as well when I get it (was supposed to come earlier than it is, hence the date of the trip, but have found out it will be delayed).  

Any other suggestions I'd be happy to hear as well.  I *cannot* take the cash and buy a clunker vehicle, so while I do see and agree with the logic on that, it's not feasible as I will need to commute 50-60 miles each way every day to work and will have to have reliable transportation, as well as my parents have flat out told me they won't kick in their $4k unless I get a vehicle that will be a "good" car and a whole list of other prerequisites about it being under 100k mileage, etc., etc., etc.

Thanks!

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Personally I don't think how much downpayment you put down with Navy will make a difference with them.   When you are pre approved with Navy they give you an amount they feel comfortable with lending you regardless of how much downpayment you may have.  In I don't even think they ask about that when filling out the application.   They look at your credit score, they look at the internal credit score they have for you along with your income and DTI then they deternmine an amount if any they are comfortable lending you.   

[Anonymous]

I hadn't noticed the APR, to just be flat out completely honest with you.  You have to actually do a search for vehicles to get the APR, which I just did now to give you some answers.  I saw that the rate fluctuated depending on the vehicle, an example would be a 2014 Crosstrek, price $16,995 (which is more than I want to spend, so this is just a example), APR was 14.1%, regardless of term length. The lowest APR I did see was 11.96%, the highest was 16.49%.  All of which are incredibly high, but I expected as much.  The goal here is to get back to work and take care of collections, etc., and refinance within six months to a year maximum.

As far as flying, my parents bought the tickets for myself and my spouse to fly there - not that it was very much as we scored pandemic-desperation rates from the airline and we are just talking about New Orleans to Dallas, not cross-country.  My parents want to be involved with the purchase for sure, but more than that I haven't seen them in a long while like everyone else, for them it was more an excuse to each take a week off work and have us come for a visit, and just during the visit we will pick out a vehicle to drive back the 500 miles to where I live.  All that is not a big deal, at all.  My parents just are diehard Texas-is-G-d's-gift-to-the-world kind of people and they are just absolutely convinced that I couldn't possibly find as good a deal where I am at as what I woul dbe able to find there, and it is their money after all that is primarily paying for the vehicle so I have to go with what they want me to do here - from buying it there, to having it match all the other little criteria my dad thinks must be met such as the under 100k miles.  Subarus are workhorses that routinely rack up 3x that many miles if not more, my Outback I had I drove past 200k and didn't have any problems with it, but when my dad gets something in his head there is no shaking it out.

My background is business management, am bilingual, I have an AAS in IT, a BSBA in Global Management, and during my downtime I upgraded my education and now have an MBA as well, so I expect I will find a good job, and Social Security has granted me a Ticket to Work so any potential employer gets tax breaks to sweeten the deal which will also work in my favor.  So while I am looking for a vehicle that I can afford the payments now, today, as is - ridiculous APR notwithstanding, I fully expect that within the next two to six months maximum I should be able to not only easily make the payment, but also like I said earlier, be in a position to fix what happened back in 2018 with my credit and refinance down to a more practical rate.

[Anonymous]

Yes, my parents are the absolute best mom and dad I could ever ask for!!!  They have been just awesome.

Lender honestly does not matter.  My thoughts on asking NFCU was for two reasons: one, because I already have a banking relationship with them which I hoped would work in my favor, and two, that would add another layer to my relationship building efforts with NFCU that would make future purchases, etc., go even more in my favor.  I am fully resigned to the fact however that it is likely they will deny me or give me a higher APR than what maybe I could get elsewhere.  If that is the case, I am fine with a different lender, although at refi time in six months or so I will try them again.  I had specified NFCU because so many here have extensive experience with them, and yes, because the reasons above would love to use them, but I am not holding my breath over them.

And like in my OP and in my reply a moment ago to another commenter, I do wish my parents would go for a cash only deal.  But they won't.  Out of respect for them, and of course since they are putting up most of the original cash, I have to go with their prerequisites - the latter making it so I really don't have a choice.  They insist I buy a vehicle that will "last going forward for some time, without being constantly in need of repairs."

My parents are high earners and my mother's FICO last time they refi'd their mortgage was 840, dad's was just a few points less.  One would think they made good money decisions - and they really do, except for when it comes to cars.  Until recently, they would drive a vehicle until it quite literally fell apart, putting $1000's in repairs, rather than have a car payment.  My sister and I have told them and told them that their car payment for nice new vehicles would total less than what they spend each month on repairs, and finally they listened and went out and got them a pair of new Lexus (pl. Lexi??  haha).  But that whole experience with cars - mom's last was a Ford Taurus and dad's was an Explorer - has tainted their view of what a good used car could actually be, along with their view of anything Ford, which is a shame.  It was hard enough to get them to ok me considering Subaru instead of Toyota products, let alone getting a cheaper vehicle like a Ford Escape or a Chevy Trax.

[Anonymous]

Ok, thank you!!  That is really the information I wanted to know.  I really appreciate your insights.  Have a great day!

[Anonymous]

Just try to prequal for a loan from a few places and see what happens. I'd certainly temper your expectations based upon your current credit score, income level, and past credit history. 

Also, just a word of caution - it's always wise to make financial decisions based upon your current financial footing, not what you expect/hope it will be in the future. Making decisions based upon a job/income level you hope to have later on has a chance of leading you back into financial hardship. 

[boulderer]

you will struggle to get financed at a non-usurious rate without a cosigner - i got denied by NFCU recently (with credit north of 700) and downpayment isn't even a part of the application, they either trust you enough to lend you money without a down payment or not at all, as far as i can tell. they aren't going to want to hear stories about money you might get in the future.

going to echo what others said - sounds like you need a 5k toyota from a private party, not a 13k subaru from a dealer.

used car market is insane right now, but you can still probably find base model corollas/civics, and other reliable cheap cars with tons of life left on them for around 5k. i recently sold my old pontiac vibe privately with 160k miles and without any mechanical issues (just cosmetic ones) for $2600. i bet 5k gets you a newer/lower mileage one, and they are great dependable cars with a corolla drivetrain.

try real hard to sell your parents on something like that. if you just buy a car for cash you can make payments on all your collections and improve your credit to buy something else in a year or two, not make payments on a high interest auto loan and be stuck in debt. just do your homework on reliability/cost of ownership and pay for a PPI.

also as someone who just bought a new subaru, i can tell you that a huge chunk of subarus under 13k will be from the failing head gaskets era so you would need to be prepared to pay as much as 3k out of pocket for a repair, which will be even harder if you have a high interest auto loan. 

if you absolutely are going to go the route of financing with poor credit, i would actually suggest going to kia or hyundai and buying a new base model subcompact sedan. you will be more likely to be approved at a better rate on a new car usually, the price on the bottom end of those new cars is surprisingly close to 13k, and it comes with a 10 year/100k powertrain warranty, and will be more safer, reliable, and fuel efficient than a 13k used subaru.