I'm in the process of buying a home, would it help or hurt me to go out and finance a car today?

Question

All these 4th of July sales are looking really good to me today and I need a new car, Should I wait or go ahead and get one?

Answer 1

Don't even THINK about financing ANYTHING else until you CLOSE on your home! Not even a Big Mac!

Once you've submitted a mortgage application the first thing that they told you (or damn sure SHOULD have told you!) is do NOT apply for ANY other credit (other than another mortgage for comparison shopping purposes) or take on ANY more debt until your loan closes.

Every time your credit is pulled for a different type of loan product (car loan, credit card, mortgage, personal loan, etc.) your score takes a hit. (Multiple pulls for the same loan product over a short period of time are counted as one so it won't hurt if you comparison shop.) If you have a strong score -- about 750 or better -- that probably won't hurt enough to affect qualifying but if you're weak then it could be a deal breaker.

Worse yet, if you run out and buy that car your debt-to-income ratio will be affected significantly. If you're already at or close to the limit your mortgage application will be shot down by the underwriter and you WON'T be buying a home.

Answer 2

You do not "need" a new car. It is dumb to buy a car on a loan--you lose SO much money! I only buy used cars and ALWAYS pay cash. A house is much more important. They tend go up in value. A car will always go DOWN in value, and if you buy one with a loan you will quickly owe more on the stupid car than what it's worth. DO NOT BUY A NEW CAR! There's going to be so many expenses when you buy a house that you aren't yet aware of that you will very quickly regret buying the car. DON"T DO IT! Very stupid thing to do. You need to develop some maturity and gain more control over yourself. Don't fall for the new car advertising--be smarter than that and only buy cars you can pay cash for. Even with that, do NOT buy one now! Very wrong time to do that. It sounds like you are out of control in your spending. And btw, a lease is absolutely the worst way to get a car.


Kent in SD

Answer 3

1) If you take on any new debt, it could harm your ability to qualify
2) Your budget is already going to be a lot tighter with the house, is the car something you NEED or WANT?
3) When you first move into your house, you are going to have a lot of little things to do that are going to add up very quickly, so don't spend all of your pocket money right away

Answer 4

If you want something new with a warranty, try leasing. Or go for certified used Honda's or something. They hold their value really well. I just leased a 07 Pilot in December, I also just closed on a home in May. I went ahead with the car first because a friend that works at a bank told me that it would be harder to get the car after incurring a mortgage! Go for it!!!

Answer 5

need a new car? A good used one won't work huh?

sale at a car dealer? no such thing... it's just stupid marketing tricks that we all fall for....

cars lose 60% of value in 4 years... to understand what that means, roll down your windows once a week and throw out a $100 bill.

Answer 6

I'd wait until after your mortgage is approved. Taking on car payments will leave less money available to you, so could affect your ability to get the mortgage you want.

Answer 7

i think the car can waite until you finished your process of buying a home..


Miss Hollywood..

Answer 8

BAD

It would be a mistake to add thousands of dollars to your debt. You won't get a home loan for as much, which means you won't have as many choices for houses.

Answer 9

yes it would be bad. theres something called debt ratio taht the bank looks at, & if your debt to income ratio is too high they will either turn you down for the loan or give you a higher rate

Answer 10

Financing a car is alot more stressful then you think. Its almost not worth the trouble.