We hope to have our credit fixed up and get a mortgage next spring/Summer. We currently have a high interest rate auto loan. If we trade it in for another car late this yer with a much lower payment will that be a negative towards getting a mortgage?
Probably not. You'll take a slight hit for the credit pull on the new car loan, but that will not be as big of a deal in a year's time. Also, having a lower car payment will help in terms of your DTI.
I think it would be better. Should help your DTI. I am actually currently in escrow after purchasing a new car with a high interest rate on 12/31/2011. I was told I would have probably been approved for a bigger loan but because my car payment was so high they couldn't approve me for more because of my DTI. I probably should have waited on the new car but just had my first child and needed something bigger than what I currently had.
