I have good credit score. I am planning to buy new car[march 27th] with car financing just after the day of my house purchase[March 26th]. I already locked my House mortgage loan.
I fear house purchase would affect my credit score and hence higher Car financing APR.
Can any one advise me please?
2007-02-11 06:20:09 · 5 answers · asked by Curious_Rex 2 in Business & Finance ➔ Credit
Speaking as a nationally know credit score and lending expert (book, rado shows, newspaper columns, etc.):
WHEN the home loan hits the credit reports you will see an immediate drop in credit score--as much as 40ish points if you are a first time home buyer. Then the scores will recover as your first and subsequent payments are reported on time.
If you buy a car AFTER the close of your home loan, you are doing it the smart way. It will take days or even weeks or months for the home loan to appear on your credit--depending on the lender. Don't worry so much!
But watch your debt ratio with the two new payments--do not over-extend yourself. You are not yet used to the home payment--and it is often more than rent payments were.
Personally, I think a better strategy is to wait about four/five months into home ownership to add vehicle debt. Think it through as to why I suggest that.
2007-02-11 06:55:58 · answer #1 · answered by supercreditguru 3 · 0⤊ 0⤋
All you need to do is make sure you can handle both payments at the same time and all the insurance for both your mortgage and you car, too. Your mortgage payment should not be more than 33% of your gross income.
Ways to lower the APR on your car is put a bigger down payment or shop for your auto loan just like you did for your home loans to get the best rate available. If you buy last years model, many times, the dealer will have breaks on their in-house financing or cash back on last years models to move those vehicles off the lot faster.
If you ever get behind in your payments is the time when to worry about your credit. Just pay all your bills on time and everything will be fine.
2007-02-11 06:32:13 · answer #2 · answered by annazzz1966 6 · 0⤊ 0⤋
It will depend on how quickly the home lenders report your loan. I'm sure larger organizations report daily or weekly, while smaller instituations may only report monthly...some even annually!
So that's what it come down to, the policies of the lenders you are dealing with.
Is what you fear possible? Yes. Is there a way to know for certain? Not that I'm aware.
2007-02-11 06:25:35 · answer #3 · answered by kb 2 · 0⤊ 0⤋
Bigger problem is debt to income ratio. Lenders add up all the mimimum monthly payments on your report and compare that to you income. You can have geart scores but if they don't like debt to income ratio you may not get loan. That's why they have stated income loans. You can use other sources of income that you may not have documents for.
2007-02-11 06:29:14 · answer #4 · answered by Gunny Bill 3 · 0⤊ 0⤋
Any new accounts will affect your score until they show some history. However, mortgages don't affect your score as much as something like a credit card.
2007-02-11 06:44:59 · answer #5 · answered by Kevin K 3 · 0⤊ 2⤋