Buy a house and a car at the same time?

Question

So, my wife and I have been married for 6 months and need a new house and a new car for her.

However, everyone I have talked to recommends not making a major purchase before buying a house. Our lease expires in July and we need to provide a 2 month notice. So, do we just suck it up and buy a new house right now and wait till after we move in to buy a new car? Or do we get a new car right now and extend our lease another 6 months? Or do we buy them both in the same time period?

I have excellent credit (740+ fico from all 3 credit agencies) and one car loan already which will be paid off end of year. Very little downpayment to work with though.

Answer 1

It depends.

Where do you live? Before you commit to either one research your real esate market. Pick the house you think you want and find the going market price. Ask an agent for the following exact comparisons of the house you want. Including school district, builder, footage for house and lot, number of beds and baths. Then ask for a report with the following information. A good agent will be glad to do this. If they do work for you, continue to work with them. It is important to compare apples to apples.

How many days does it take to sell this kind of house
How many are on the market
How many in foreclosure
How many sold and if:

any were short sales
any were foreclosures
any were divorce sales
any were probate sales

Discard all of these and what is left is the market price

The more homes on the market for the longer time and price decreases indicate the market is going down. When this stays the same it is time to seriously think about buying.

If the market is dropping, extend your lease, buy an inexpensive no payment or less than 10 month payment used car for the next 12 months.

Determine what your house payment is going to be. While leasing take the difference between your lease payment and new house payment and put it in savings. This will build a reserve account. Most lenders are asking for a reserve with low down payments, even with good credit.

Preview your partners credit for problems.

Then decide if you want a committment to a house. Unless you have been together for a long time, 6 months is not that long for a relationship. Don't add a stress that you may not be ready for.

I am a Real Estate Broker, Mortgage person. Decide what is correct for yourselves.

I hope this helps. Good Luck

Chris C

Answer 2

Whoa, STOP! Do NOT buy the car yet. Buy the house. AFTER you CLOSE the deal at the closing, THEN buy furnishings, a car, etc. You can screw up your credit score and available credit really easily doing things out of this sequence, and that would probably cost you the house. Even if it didn't it would give you a much higher interest rate on your mortgage. So.....after you close on your house and have your mortgage squared away with the bank, then buy the other things. It will save you a lot of money in interest. P.S. - venicefloridarealtor is full of it......and of all the properties I've bought and sold every time the realtor has either told white lies or outright lies. Beware of anyone's advice on here who has property to sell you or a mortgage to offer. If they're offering you mortgage services they make more money if you buy the car first. If they're selling you a property they might get a higher sale value if you are needing to finance for a longer period of time. Stick with what's best for your own pocket.

Answer 3

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RE :Buy a house and a car at the same time?
So, my wife and I have been married for 6 months and need a new house and a new car for her.

However, everyone I have talked to recommends not making a major purchase before buying a house. Our lease expires in July and we need to provide a 2 month notice. So, do we just suck it up and buy a new house right now and wait till after we move in to buy a new car? Or do we get a new car right now and extend our lease another 6 months? Or do we buy them both in the same time period?

I have excellent credit (740+ fico from all 3 credit agencies) and one car loan already which will be paid off end of year. Very little downpayment to work with though.
1 following 10 answers

Answer 4

Do not buy the car until you buy the house.. The banks want to see a low amount of money's going out.. The mortgage business is a ***** right now.. Banks are being very slow to loan moneys right now.. In Florida there are 30 home for sale for every 1 buyer, so the banks are in no mood to be home owners. so lending is difficult even with your credit score. Keep the car off the books until you own the home.

Answer 5

Buy the car After you buy the house, if you buy a car now it may effect your debt to income ratio's.

The house whould be the # 1 priority.

We have programs that will go to 100% financing for first time home buyers. Let me know if I can help? I work with First time home buyers everyday.
Leo Namiot - Wells Fargo Home Mortgage http://www.LeoLends.com

Answer 6

Work out which you need more. Buying a house is a big commitment. You are also newlyweds. You should avoid borrowing too much money and that will be a huge strain on you relationship. You do want to be able to afford luxuries, holidays and what about children? You need to have a bit of fun in life too.

Don't forget you haven't exactly paid of the other car loan yet. So if anything happens to you, which I hope not, you lose your car too.

Answer 7

Unless you have money put away to pay a deposit on a new home, you probably won't be able to get a place anyway.

Some mortage brokers allow to you make your loan bigger in order to purchase a car, however I wouldn't recommend this.

What is more important to you - a house or car? You need to decide and pick one, but probably not both at the same time.

Answer 8

Buy the house first. If you buy the car first it will increase your debt to income ratio, making it harder to get approved for the home loan. If possible, wait a few months after making house payments to purchase the car.

Answer 9

I actually think it's a bad idea to get an auto loan first. You will need to qualify for the mortgage loan under the best possible conditions with as much available income as possible. Not just for the sake of available income but for the best interest rate as well. The better you look on paper the better interest rate you will get. Buy the car after you've moved in to the new house. Good Luck!

Answer 10

You'll also have to factor in family income vs household expenses, other debts (credit cards, college loans, etc.) in your decision-making. Are your jobs stable enough to withstand a double debt (mortgage and car payments)? What if your wife gets pregnant? Write down all expenses and earnings and see if you can afford the financial burden.

If you have to make a choice, I would go with the purchase of a house because it is a better investment than renting. At least you are putting money on something that earns equity for you from the start.

Answer 11

errr... a new car if you are paying in cash thats what i would call a large purchase. i would recommend knowing how much house you can afford currently. how much money after your each month should be how much house you can afford. when you have that figure, reduce it by 30% for insurance and fees for house and that should be the max monthly payment to the loan. for example 5% interest rate on a 100k loan would be im guessing 500 dollars. you should have like 650 around so you can cover insurance and other housing related fees like utilities.