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Answers (7)
- Denise Lavell, "BeachGirlRealty"
- Contributions:32
I agree with the suggestions offered. Buy an older car cash and enjoy your new home. If you are in the South Bay, I have a great referral to a reputable used car dealership. I will never buy a car anywhere else!
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
You received some good advice. From those that responded I like the idea of renting a cheap car or buying a "beater." Both would not affect your credit score or your Debt-to-Income ratios.
Happy funding, Rudi
Happy funding, Rudi
- Chris Starke
- Contributions:13
If you decide to purchase a car in cash, then you won't have a car payment to worry about. Before you make a decision check out your down payment assistance options. You may also want to see how taking out a down payment loan in addition to your mortgage payment will affect you.
Based on your income situation you may qualify for a grant or only partial repayment from the down payment assistance programs in your area. You can check with your local housing authority for additionial info.
You ability to qualify is subject to the abilities of your lender. Depending on the program you may find a comfortable way to do both with the resources you already have
- Mark Nehs, Wisconsin, "WI Mortgage Lender"
- Contributions:250
Unless you plan on having a car OR having a house then you need to figure out how both will work in your budget. Make the best decision for you on a car and on buying a house.
- Chris Starke
- Contributions:13
Purchasing a car will most definately affect your debt to income ratio. After reviewing your situation I would suggest taking a look at CALFHA . This program can allow you to better weigh your options.
CalHFA is a program for first time homebuyers. This program can provide 100% financing, as well as down payment assistance options that may help you make the decision to buy that new car, or put what you have down on a new house. Some options may even help you get a loan for your down payment that you can pay back at an interest rate you won't find anywere else.
Take a look at this link, and let me know if you have any questions.
http://www.calhfa.ca.gov/homebuyer/programs/index.htm
Hope this helps.
- Tony Accardo, "BeachCityTony"
- Contributions:96
A leased car shows up on your credit report as like an installment loan in the amount of the total amount of the payments (ie. if the lease amount was $400/mo and for 24 months then the total amount is $9.6k). With that, the $400/mo is now a monthly obligation for you and increases your Debt To Income (DTI) ratio and this can significantly effect the amount of your monthly payment capacity in the lender's eyes. Further the $9.6k debt will decrease your credit score as it relates to your total outstanding debt to income ratios. My suggestion would be to rent a car temporarily until you close escrow on a home... sometimes the lender thresholds make it tough but you may have the financial appetite to afford both.
A lease affects your score exactly the same as buying a car would. There is absolutely no difference, with the exception that a lease will probably result in lower monthly payments and thus not affect your DTI as much. This in no way means that I am suggesting leasing over purchasing a car, I am just answering your question. The bottom line is that if you buy/lease a car, it will affect your credit score somehow and the fact that it's a lease is irrelevant.
A suggestion: If you truly want to buy a home, and you are that strapped credit-wise and cash-wise, you may be better off buying a beater and driving that for a bit and saving a bit longer so you don't get in over your head. What happens after you buy and it's the water heater that dies, or the AC?
You don't sound ready to buy.
A suggestion: If you truly want to buy a home, and you are that strapped credit-wise and cash-wise, you may be better off buying a beater and driving that for a bit and saving a bit longer so you don't get in over your head. What happens after you buy and it's the water heater that dies, or the AC?
You don't sound ready to buy.
How will a 2 year lease on a car affect my ability to get a mortgage?
I have just saved up enough for a downpayment on a new home (first time home buyer). However, my car just completely died and no longer runs. I am considering leasing, because I don't want a car loan to take away at money for my downpayment or decrease my loan amount. Will having a car lease decrease the amount that I would qualify for on a loan? Would getting a lease hurt my credit score? How would leasing a car affect my ability to get a home loan?
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