Getting a mortage and new car? Need some advice

[stefnian0426]

Hi everyone, I am hoping to find some advice.

      My husband and i would like to apply for a mortgage at the end of the year or early next year. The reason for waiting is because he needs his credit score up about 20 pts and i have a old hospital bill in judgement on my report that i need to pay off first. (6k bill)

      One of the things we really need is a vehicle. We have 3 little ones and drive a beat up chevy cavalier. Although our car is still drivable, we really want something we can all fit into. Nothing fancy and not looking for anything over 5k.

      My question is, would that mess up our chances of a mortgage when we are ready to apply? Is it best to wait after getting a mortgage or during since everyone will be checking our credit?

My current equifax is 640, transunion was 619 last month, not sure about experian. I also have 3 inq on my report. (2012,2013, jan 2014)

[ezdriver]

If you need the car now then get one now.

How do you plan on buying a car priced up to $5,000? A used car lon with financing?

[Mrs_hambright]

What is holding his score down? I had a 20 point jump from paying my credit cards down under 10%. I would talk to a lender (without a hard pull) and see what they say, you may be able to get a pre-approval.

[stefnian0426]

I have heard of some places that offer a buy here and pay here option. I know that is usually for bad credit but from what i heard it is more easier to get approved.

As i would like to stay under $5k- my limit would be 10k (although less is always better for me).

I never knew you could get pre approved for a car loan. How does that work?

I just dont want to mess up any chances of us getting a mortgage. I have had many items on my credit report. Sad to say but 6 months ago i have 14 bad items on my report. Never checked so didn't know that anything was on there and moved so much in the last 5 years i never got any notices. After alot of saving and paying, i am finally down to 2 items (that is holding us back getting a mortgage.) One for $1,000 and a hospital bill for $6k.

We were already given a def of 150k min. for a home loan through our bank ( perfect for our area) Just need to finish paying off those 2 items. It would be FHA.

[superdad]

Look at it this way.  Auto loan 350/month. It will count aginst your debit to income ratio.  So thats 350/month you could use towards a house payment.  So ask yourself, can i drive the car for a little while longer?  Save up more cash and buy a used van? NEVER go to a buy here pay here!!!!!  You will be paying 3 times what its worth. But if you do find one that dosent report to the CRA's.

I know around here 350/month can mean the difference between a 150k house or a 170k. 

[Sock]

Keep driving the old one until after you close on the house. If you have to, borrow or rent a vehicle for a few weeks if you need to.

Way too many people lose a house just because they bought a washer/dryer on sale the week before closing. Just imagine what a $5,000 car loan would do?

[TnTNYC]

"I have heard of some places that offer a buy here and pay here option. I know that is usually for bad credit but from what i heard it is more easier to get approved."

My personal suggestion is to put this idea out of your mind immediately.  That is the used-car dealer floating you the cash and charging a near-criminal rate for the privaledge of doing so.  Especially with children in the picture, that "buy here, pay here" stuff has the potential to affect you well beyond ruining your chances of getting a mortgage.