How soon do you think you'll have your credit card bills paid off? Are you concerned with your debt/income ratios? Good payment history will help your credit score. If you're worried about your income/debt you may want to wait to purchase your car. How soon are you thinking you'll want to buy? If your a ways out, it might not be a bad way to establish credit.
Century 21 Diversified
As a veteran myself, I have used my V.A. Loan guarantee more than once. It is a great benefit to having served our country. Another benefit to it is that they actually allow you to carry more debt than on a FHA loan. VA ratio is 41% and FHA is 29%. Because you have served our country, lenders consider you to be more trustworthy than the general public. You are allowed to carry more debt. When you get pre-qualified, your lender can run the numbers to be able to compare all of your options. You do have a lot of options available to you. I work closely with my lender for my clients best interests in mind. They have competitive rates and great service.
Have a Merry Christmas!
1.) Dave Ramsey's School - save until you can pay cash for everything. - Not a bad idea, however, I am not that type of personality. Some are and I admire them for that.
2.) Use the guidelines that are set forth. The mortgage industry is tighter than it ever has been. If you can qualify for a mortgage with your car payment and YOU are comfortable making those payments then just be informed when you purchase and you will be very happy.
Whichever your choice is just be sure you are comfortable in your choice. Make sure when you choose a Realtor and Mortgage Loan officer that you choose someone with experience AND they are looking out for YOUR best interests and not their own.
Again, Merry Christmas and I hope this wasn't too overwhelming :-)
You have asked some great questions. Debt to income ratio is one of the key factors in determining credit worthiness. Definitely do not purchase a car before the house. Car loans are easier to get than a mortgage. I have a great mortgage lender that can give you details on your current status, if you are interested. Now is the perfect time to purchase a home in the Indianapolis area. I would not wait any longer to purchase a home. There are down payment assistance programs available that can get you in a home right now. There are even $0 down programs for rural areas and $100 down programs HUD homes. I can discuss your purchase options in greater detail, if you like by giving me a call at 317-354-7410. You can visit my website at http://www.WilsonRealtors.net/QuickSearches.html
Keller Williams Realty
I see Gary has answered and he is an awesome agent but I would like to throw my 2 cents in the bucket. First off, this is a very typical question so don't feel that you have a unique situation as many buyers also have the same needs as you are talking about.
I would approach this problem differently. I would contact a mortgage loan officer to run your credit, see what your debt to income ratios are and see if you have any oddities that you weren't aware of on your credit report. (for instance, I had a mortgage originated on my birthday on my report...meaning I bought a home the day I was born...)
From there you will be able to know how much disposable income you have, if any, to use towards the purchase of a new vehicle. They will be able to tell you how much you can pay per month towards a car and still afford $xxx.xx in a house payment with qualifying within the VA guidelines for residential mortgages. So you may be able to take advantage of a great car loan and purchase a home at a great interest rate!
Lastly, if this is your first home you would qualify for the $8,000 tax credit which uncle sam will mail you once you purchase a home. (within the time frame of the program)
Great question and feel free to contact me if you would like a reference in the mortgage industry or have questions about the tax credit.
Good luck and have a Merry Christmas!!