Refi Car Loan 4 months before mortgage app?

[Anonymous]

Hello there,

My local CU is offering a great deal on auto refi loans right now- 2.99%. I am thinking about refinancing my new car loan, which I just took out in May. We plan to apply for a construction loan in January, so I’m a little concerned.

The monthly payment would lower a bit, but then I’d have a HP. Since my current car loan was just in May, a new one shouldn’t affect account age much. Thoughts?

[CramEiko]

IMHO - I wouldn't touch it. It's easier to mess with the car stuff than the house stuff. Maybe a refi is different. I haven't been through one yet. How much lower will your new car payment be vs the savings on your house? How long the lower apr rate will be offered. Can your Fico score take a new HP since it would be a second HP within the year.

[Jnbmom]

I think it depends on how much money you would save? If it's a significant amount I don't think "one" HP would be detrimental. 

[Anonymous]

Well, I’d be paying about $50 a month less.

However, my mid mortgage score is struggling to get to 700. I’m doing AZEO, and I should get there in November and that should raise the mortgage scores. Maybe the risk of a second HP in one year isn’t worth it. I guess I can always refi next year after the mortgage approval...

[Jnbmom]

Well for 50 bucks and if you are trying to maximize your score , I think I would wait and focus on getting your score optimal enough to qualify for a mortgage with a good rate .

[randomguy1]

The potential money saved by a better rate on an auto loan weighs much more on the mortgage side. Much more money for a much longer term. Every bit saved will could substantially more. You never know, but not worth saving $50 a month for a few months.

Instead, pay your auto payment every month at the earliest possibly date. You will most likely be paying on more principal at that point. It’s usually a day or so after the statement date and almost a month before the due date.