Home Buying in Roswell>Question Details

Angel, Home Buyer in Roswell, GA

I would like to pre qualify for a home loan nxt month, however; I would like to purchase a new car this mo. Should I wait on the car loan?

Asked by Angel, Roswell, GA Tue Jan 25, 2011

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Answers

29
I recommend waiting on the car purchase until after the home purchase unless the monthly payment for the car is decreasing vs. your current car payment (unlikely right?).
2 votes Thank Flag Link Tue Jan 25, 2011
Talk with your lender as they will know for sure, but 90% sure you need to wait on car loan. In fact, dont make any major purchases until AFTER it records, dont want to give the lender any reason(s) to deny the loan.
1 vote Thank Flag Link Tue Feb 15, 2011
Yes, WAIT on the car loan. You should make no big purchases leading up to buying your house.

John J. Reinhardt
REALTOR
Solid Source Realty
http://www.infrontmarketing.com
1 vote Thank Flag Link Tue Jan 25, 2011
The biggest reason I would stay away from purchasing a car prior to purchasing a home is that often car dealers will shop your loan at 25 places to try to get the lowest rate. That reduces your credit score by 1 point for each inquiry. If this keeps you from qualifying for a new home, it would be frustrating. Speak with a mortgage lender and don't have everyone - car dealers and mortgage lenders all pulling your credit and pulling down your credit scores. Take some time and get some good advice. Good luck in your home and car search.
0 votes Thank Flag Link Tue Feb 15, 2011
Angel,

I may be the 23rd person to tell you this, but I would simply have your lender add the hypothetical car payment into your monthly debt total and have them tell you whether you still qualify or not.

While we generally discourage buyers from accumulating new debt before a home purchase, if you need the car and you still qualify, there is no problem making this purchase.

If you would like a disinterested 3rd party to look at your situation, give me a call or an email.

Thanks,

Timothy Brown | President
Academy Residential Mortgage, Inc.| academyresidential.com
11380 Southbridge Pkwy, Suite 200 | Alpharetta, GA 30022
678.468.5626 x110 | fax 678.935.1156 | cell 678.467.9959
0 votes Thank Flag Link Tue Feb 15, 2011
Angel you should wait on the car loan.

Good luck.
Perry
0 votes Thank Flag Link Thu Jan 27, 2011
Why not consider a true mobile home - best of both worlds.

Hank
Web Reference: http://www.hrmiller.com
0 votes Thank Flag Link Thu Jan 27, 2011
Wow Julie - that is great advice!!
0 votes Thank Flag Link Wed Jan 26, 2011
Without even looking at what my fellow agents have responded with - definitely get the home closed on before you purchase your car. Anything unexpected comes up - you want the home, top priority!
0 votes Thank Flag Link Wed Jan 26, 2011
I think the point about waiting to buy a car until after the home has been purchased has been amply reinforced and stated - this Atlanta area post should not be used a vehicle by out of state agents to make redundant comments simply to get another post online!
0 votes Thank Flag Link Wed Jan 26, 2011
Valid question. Speak with your mortgage broker first. Safest bet is to hold on any large purchases requiring credit (including car), get your home loan funded and closed, then buy the car. Safety first.
0 votes Thank Flag Link Wed Jan 26, 2011
Looks like the consensus is wait to buy the car - and that is the advice I gave you as well in my post below.

Let me know if you need a referral to a great lender - and I do suggest you avoid mortgage brokers - especially those who refer buyers loans out to Met Life - a nightmare!

Don't hesitate to call anytime you have a question or need sound advice.

Regards,

Robert Whitfield
Broker/Owner - Realtor
Professional Buyers Broker
Relocation Expert
New Home Construction Expert
ICC Code Certified Building Inspection Expert
Advantage Realtors
678-585-9691
877-787-7167
"I Go The Extra Mile For My Clients - For No Extra Fee!"
0 votes Thank Flag Link Wed Jan 26, 2011
I would wait on the car purchase until you have closed on your home.....unless your loan officer says your ratios are more than good enough.


Scott Hutchinson
Edina Realty
scotthutchinson@edinarealty.com
http://www.scotthutchinson.edinarealty.com
C: 612 396-0692
0 votes Thank Flag Link Wed Jan 26, 2011
Hi Angel, yes most likely you should wait on the car loan. Purchasing a car now could change your debt to income ratio. Best bet is to speak with a lender to see how it would effect your purchasing power. I would be happy to refer you to a very reputable lender. In addition if you haven't found a buyer's agent yet I would love to speak to you about the job. My services are free to you and my 19 years experience can help to save you time, hassle and most importantly money.

Kindest Regards,

Sherry Mezzé
Bringing Buyers & Sellers Together Since 1994
Chapman Hall Realtors-Premier
Named #1 Real Estate Company by Atlanta Business Chronicle 2007
Member Million Dollar Club 2009
404-545-4118 Cell
770-783-8609 P Fax
Website: http://www.sherrymezze.georgiamls.com
0 votes Thank Flag Link Wed Jan 26, 2011
Short answer: you bet.
Don't buy anything big until after loan is closed. Keep as much cash in the bank as you can too to help with the Qualifying. As everyone else said too: Call your lender right away for more details on how it would effect your particular situation.
0 votes Thank Flag Link Tue Jan 25, 2011
Angel,

As many have mentioned, you should discuss your specific home buying plans before you commit to buying the car. Suggest you get prequalified for the home including the car payment and see if it makes a material difference in your qualification. If the car is an absolute necessity, then you may consider renting a car from Hertz for a month and delay your car purchase until after closing on the loan.

I can help with the prequalification on your planned purchase.


Timothy Brown
President
Academy Residential Mortgage
678 467-9959
tbrown@academyresidential.com
0 votes Thank Flag Link Tue Jan 25, 2011
Hi Angel,

Until you talk with a lender first, I would put off the car purchase - and perhaps wait until after your home purchase even if a lender says it looks ok - just to be sure nothing goes wrong. This is a once in a lifetime buyers market - if you know how to take advantage of the right opportunities and safely navigate your way through the market. It would be terrible to find out you can't buy a home because of a car purchase!

Once you get pre qualified, I would be happy to help you see and visit some very attractive properties, but first a question. How would you like to be able to see the best properties first - before someone else buys them, get way more information up front before making an offer, so you could submit an intelligent offer and assure the best price, avoid costly mistakes, and never waste your time and money submitting offers on the wrong properties? Sound too good to be true - well its not.

There is a way to get all this and more - it's called the Wise Buyer Program. It provides home buyers with an unmatched array of services, property and market information, and home buyer protections. It is simply the best way to buy or build a home in Georgia, and there is absolutely no cost to you!

For more details about the benefits of this amazing program visit the site below - then to take advantage, simply give me a call at your convenience!

To your success,

Robert Whitfield
Broker/Owner
Advantage Realtors
678-585-9691
877-787-7167
0 votes Thank Flag Link Tue Jan 25, 2011
Angel,

You should go ahead and talk with your lender now and they'll be able to tell you based upon your information, whether that will keep you from being able to purchase a home. It will clearly have an impact, but you may be fine. But your loan officer would be the one to give you the correct answer based upon your income, debt, credit score, etc. No real reason to wait to pre-qualify. Go ahead and do it now. If you need a referral to a great loan officer, just let me know. I'll be glad to help.

Aaron Hofmann
Keller Williams Realty
770-653-9601
aaron@AllAboutRoswell.com
0 votes Thank Flag Link Tue Jan 25, 2011
What does your Realtor advise? And more importantly, what does your loan officer advise based upon full disclosure to him/her? Have you made full application for a home loan? Check with your lender - most likely, if you are asking the question, unless your new car comes fully equipped with a bathroom, kitchen, and bedroom, I suggest waiting to make sure you will qualify for a home loan, then if a lender will give you a loan on a car once you are in debt up to your eyeballs on a home loan, then go for it.... Or, if your car is running, maybe put another 50,000 miles on it and park it in your new garage where no one will see it. It's all up to what is important to you and what you can actually do on paper and get approved for... check with your lender!
0 votes Thank Flag Link Tue Jan 25, 2011
answer was supposed to start with NOT.
0 votes Thank Flag Link Tue Jan 25, 2011
knowing what your credit scores are, I would highly recommend that you buy the house first. Even if your debt ratios will handle the new car payment, the credit hit for a new loan with no 12 month seasoning alone Not may lower your score enough points (if you are borderline) to cost you the loan, or even if you have 700+ score it could lower you enough to cost you a tad higher on the interest rate or points on the loan since ever 20 points is a different price in lending these days. If your score is 780 or above, then you would be good to buy the car, but I still would not chance it costing me the purchase of a home. Be safe, and close on the house first.
0 votes Thank Flag Link Tue Jan 25, 2011
Angel,
In part, it's up to you if a car or a house is more important. But here's one of most popular mistakes. Pay close attention to the timing.

Buyer qualifies to purchase a home.
Buyer is under contract to purchase said home.
Buyer purchases a new car before the closing of the home.
Lender pulls credit again just before closing, and now the car loan makes them ineligible for the home loan.
Buyer is in breach of contract and in jeppardy of losing earnest money.

Be aware of how the process works and make your decision accordingly.

Stacy Carter
Associate Broker
Home Appreciators Team at
Better Homes & Gardens Real Estate Metro Brokers
0 votes Thank Flag Link Tue Jan 25, 2011
Furthermore, these new FICO/LTV ratios for loan underwriting are a strong step in the right direction for reducing the risk of mortgage default. A lender today, is definitely not using the same guidelines as they were in October, pre-guidelines...
Web Reference: http://intowninsider.com
0 votes Thank Flag Link Tue Jan 25, 2011
The answer really depends on your current credit score and the level of debt to income ratio that you currently have. The car loan can affect both the credit score and also the percentage of debt payments to income which could also impact the amount of mortgage you may qualify for.

What would be the best way to determine this would be to speak to a mortgage loan officer and determine what you currently qualify for and ask them to tell you what affect the additional car payment and car loan would have on your credit score and loan to income ratio. Without someone reviewing at all the numbers for you there is no general answer. This would enable you to make an informed decision about this important purchase.
Web Reference: http://www.topagents.com
0 votes Thank Flag Link Tue Jan 25, 2011
Debt to income ratio. Figure that out with a mortgage lender first, then meet with a bank about a car loan if you really, really must have new car debt in order to satisfy your lifestyle.

Otherwise, cars depreciate severely, so check yourself before you wreck yourself.
Web Reference: http://intowninsider.com
0 votes Thank Flag Link Tue Jan 25, 2011
Dear Angel~

My suggestion to you after qualifing homebuyers for 18 years is the following:

1. Pre-qualify now and have the loan officer look at it both ways.. With "X" for a car/monthly and without "X" for a car/monthly.

2. If a car is something you need to get you to work and back, of course income and work is important and getting there is even more important. I understand that.

3. If the new car is cause I love this new car and I have a car, then looking at the "whole picture" should be able to answer alot of your questions.

A loan officer with the expertise and skills should be able to give you all the answers you will need.
I would be honored to assist you if you find you would like to talk. Best of luck to you...

Lynel Adams/Sr Mortgage Consultant/Community Capital Bank

770-318-6740
0 votes Thank Flag Link Tue Jan 25, 2011
If you purchase a vehicle it will of course go against your debt to income ratio. Contact a lender and allow them to look at your total picture and see if your ratio will allow you to purchase a home in the price range you are looking for as well as the vehicle you desire. That is the only way to truly tell. Good luck and let me know if I can be of assistance.

Sincerely,

Brad Hartman
bhartman@cmghl.com
404-449-9876
Web Reference: http://www.brad-hartman.com
0 votes Thank Flag Link Tue Jan 25, 2011
Not being a financial adviser, Angel, I can only give an opinion. If you have no concerns that you will qualify for a mortgage, it may not matter. If you do have any concerns, however, you should likely wait. If you have any other questions for me on housing, please call or email and I will be glad to share my thoughts with you. Good Luck!

Michael Hammond
SellsRealty@gmail.com
404-538-5499

http://www.SellsRealty.org
0 votes Thank Flag Link Tue Jan 25, 2011
There is no set answer to that question. GEnerally, you should not take on any new debt prior to qualify and subsequently closing on a home.

Rodney Mason
Sr Loan Officer / FHA 203K Renovation / HomePath Specialist
Prospect Mortgage
Atlanta, GA
(404) 591-2453
NMLS #151088
http://www.rodneymason.com
0 votes Thank Flag Link Tue Jan 25, 2011
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