Posted on: 22nd Sep, 2010 08:07 pm
My car was recently totaled (today in fact) and I'm worried because my boyfriend and I have been planning to buy a house next summer. I need a car and the settlement is not enough to buy a reliable one. We'll be looking in central Pa which is not a very expensive housing market (I've seen many houses we would like under $300k) and I expect (when he finishes the job hunt) that we will have somewhere between $100-140k per year in income. I owe $148K in student loans and he will owe less than $15k. He has excellent credit (730) and I have good credit (680). It seems as though we should easily be able to accomodate a car payment, but what should I do as far as my impending car purchase to minimize the damage to our chances of qualifying for a good mortgage?
Hi tbradydvm,
Purchasing a car just before the mortgage can increase your debt to income ratio and hamper your chances of qualifying for a mortgage. However, as you're planning to purchase a house next year, you can go ahead and purchase a car now. Though it will increase your debt to income ratio, if you pay off the dues on time, then it will help you increase your credit score. This will in turn increase your chances in qualifying for a home loan.
Take care.
Purchasing a car just before the mortgage can increase your debt to income ratio and hamper your chances of qualifying for a mortgage. However, as you're planning to purchase a house next year, you can go ahead and purchase a car now. Though it will increase your debt to income ratio, if you pay off the dues on time, then it will help you increase your credit score. This will in turn increase your chances in qualifying for a home loan.
Take care.