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Car Loan or Home Loan First??? Please help.

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glamchick
Established Contributor

Car Loan or Home Loan First??? Please help.

I have been working on cleaning up my credit... thanks to MYFICO boards I have made it to the 600's.
 
I wanted to buy a house within the next 6 months.  But unfortunately our 2nd car is done...motor is gone.  So I am looking to finance another car used under 15,000.  We are car pulling now which is fine but its hard sometimes. Plus if this car breaks down neither of us have a way to work and thats not a good thing Smiley Sad
 
So my question is should I wait to buy a car until we get a house?  Will this lessen my chances of getting a house since I will have a car payment? 
 
Thanks for you help Smiley Happy Smiley Happy
Gardening since 5/3/2016
Message 1 of 4
3 REPLIES 3
treschic
Frequent Contributor

Re: Car Loan or Home Loan First??? Please help.

i have no personal experience in this, however i am in the same position.  i am in the process of cleaning up my cr, with hopes of getting a house sometime this year (hopefully), but my cars is systematically shutting down as well, every month is a new issue and it has already been in the shop 3 times in the last 4 months, and being that it already has 115,000 miles, i don't expect it to last much longer without major repairs such as a new motor, engine, alternator.  anyways, i've been told by everyone that you should get the house first, then the car.  i think mainly because the mortgage (at least in today's economy, not like previouslly), is harder to get than an auto loan.  i think they generally don't want you to open any new tl within 6 months of applying for a mortgage.  there is probably a better reason.  but, you do need transportation to get back and forth to work, because if you can't get to work, you don't get a check, and therefore, you definently won't qualify for a mortgage without a job.  so, i guess you have to gauge how much longer your current car will probably last. so, just weigh the pros vs cons.  if you think it can last, try to wait it out, until you get the house, not just get approved for the mortgage, but when the money clears, because apparently, even after getting approved, they still periodically check your cr, and if you applied for a car loan and now have a new tl, your score will have dropped, which may impact your interest rate or sometimes even qualifying for the mortgage.  hope this helps. 
Message 2 of 4
Anonymous
Not applicable

Re: Car Loan or Home Loan First??? Please help.

I agree with the last post!!! here's a FYI- with FHA loans your outgoing bills including mortgage can't exceed some where around 43% of your total income to be approved. So try to fit what your car note may be with all your current bills that show on your CR to see if it's a good idea. Every loan is different but it's some kind of guideline. Hope it all works out for you.
Message 3 of 4
Anonymous
Not applicable

Re: Car Loan or Home Loan First??? Please help.

buy the house first-----if you buy car--they will count the car payment as monthly debt you have to pay out--- for ex if you have credit cards with ----maybe 25 a month for 3 cards that 75 a month of debt---if you add on loan----$300 a month----  this 300 is less the amount you will be allowed to qualify for home  mortgage----fix car by house first----trust me --- this 300 more a month on car payment could kill a deal on house that you may want to quaifiy for based on you debt to income.


Message Edited by lalahouse on 02-19-2008 02:12 PM
Message 4 of 4
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