If you were going to buy a house and a car around the same time

"BugEyedBimmer - back in the Saddle Dakota Leather" (bugeyedacura)
03/17/2014 at 13:19 • Filed to: None

Which would be better to buy first? My wife seems to think that they don't take house loans into consideration when looking at your credit to buy a car. And the vice versa was true. Even though I worked at a car dealership and know that they DO look at stuff like that (sometimes even moreso than your credit scores) she still won't believe me, and says we need to buy the house first and then go the next week for a car, as if they're just handing them out without checking that shit.

DISCUSSION (25)

Reigntastic > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:24

I'm almost at this point myself. I really would like to have some showy new car, but I honestly have found that I'd rather have covered parking and a garage. Saving for down payments sucks.

highmodulus > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:24

House, as it will eat your budget like crazy. Better to know how much you have left before you go look for cars. There will always be cool cars when your budget allows.

BJ > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:25

My 2c worth (just guessing, really): Having a car loan may limit how much you can get for your mortgage, while having a mortgage might exclude you from getting a car loan.

On the other hand: With the current economy I'm guessing you'll get that car loan anyways.

I would get the mortgage first.

MontegoMan562 is a Capri RS Owner > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:25

4 years ago my wife and i did the other way around. It was out of necessity because her car died. Bought her first Jeep 2nd week of January, closed on our house last week of January (2010). Yes my mortgage guy noticed.

McMike > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:25

If you can afford both of them, get the house first. If you can't, well... that's a completely different thread.

They look at your monthly overhead before approving your loan. A car payment will take a dent out of that, leaving you less money "available."

BugEyedBimmer - back in the Saddle Dakota Leather > Reigntastic
03/17/2014 at 13:26

I don't even want a showy car. We're going to be moving farther from my work, and my commute will be 100x easier if I have something that meets the alternative fuel rules for the HOV lane.

BugEyedBimmer - back in the Saddle Dakota Leather > highmodulus
03/17/2014 at 13:28

Unfortunately, it's not that cool of a car. I'm looking at a 2013/14 CRZ. We'll be moving further away from where I work, and a lot more of my commute will be on the toll road. The tolls wouldn't be any cheaper, but I could ride in the HOV lane as it could take up to 40 minutes off my commute on congested days.

BugEyedBimmer - back in the Saddle Dakota Leather > MontegoMan562 is a Capri RS Owner
03/17/2014 at 13:30

Mine is out of the need to have a car that can ride in the HOV lane. We're looking to move further from my work (more bang for your buck outside of NoVa) and I need something that will make the toll road not have me sitting for an hour.

Nothing > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:33

Mortgage first. Your finances are much more thoroughly scrutinized with a mortgage. Not that a car loan would take you out of consideration for a mortgage, but one less thing for the underwriters to potentially raise an eyebrow at. Getting an auto loan is much less a process than a mortgage.

highmodulus > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:34

40 minutes is massive, but it maybe worthwhile to find something cheaper if you can and still use that lane.

CAR_IS_MI > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:42

Your DTI (Debt To Income) plays a larger factor in buying a house than a car. Generally, you can buy a car with a high DTI, as long as you have good credit. If you have low credit and a high DTI the bank will see you as a higher risk, the more risk, the less likely you are to get a loan and / or have a higher interest rate.

Few tips for you: Current regs on mortgages require at no more than 48% DTI ratio to qualify for a traditional mortgage. Anything FHA will require PMI (mortgage insurance) which will tack on extra $. They will look back at your bank account for the past 6 months, be prepared to explain any large, non-regular (things that aren't your pay check, for example, if you get cash rent from another property or you cashed out an investment to use as down payment) transactions into or out of the account(s). Do not make any sudden changes to spending habits; i.e. paying off large debts on credit cards. Don't ask why, but it throws a flag.

MontegoMan562 is a Capri RS Owner > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:49

gotcha.

Yeah one thing that probably helped us is that I was the secondary on the jeep loan and my wife isn't on the mortgage at all.

Sn210 > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:49

I bought a car before the house as a credit building exercise, but with like 4 years in between

Reigntastic > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:52

Yeah, my commute went from being ~1 mile to being ~35 round trip a few months ago, so I know what you mean. I've been spending $40 on 93 octane for the MR2 pretty much every week now. I'm definitely in the market for something more fuel efficient, but I can't decide on how I'd rather accomplish that. It's easy to find something economical in the new marketplace, but I'd easily spend 15k on a good commuter vehicle, and I'd rather spend that money on go fast parts. On the other hand, a used vehicle would be a nice fit for it, but I'm having a hard time finding any with a manual gearbox that isn't over 200k miles.

The Ford Focus/Fiesta have been at the top of my list, but there's no HOV lane on the highway I take to work. Motorcycles are HOV eligible depending on where you live (obligatory #twowheelsgood), but for obvious reasons might not be what you want for a long daily commute on the highway. CRZ might be a nice choice for you.

trmoore09 > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:53

We were told by our mortgage person to not do anything until after the mortgage was finalized. Adding a car onto your credit will effect the mortgage heavily (debt-to-income ratio, your credit score, interest rate, etc.) and usually as long as you have a good credit score and your yearly income shows that you can afford the car, you'll be fine on that end. So mortgage, then car.

Reigntastic > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:56

I didn't even read this post until after I'd recommended a CRZ. Nice.

Deal Killer - Powered by Focus > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 13:58

If you can, buy the house first, as the lender will look at your total debt load when making a decision on your loan. The car loan interest rate may take a hit due to the house loan, but, since it's smaller, won't cost your as much. A friend, who is a Realtor, had a deal fall apart when the prospective owners show up to the home they wanted to buy with two new Jeeps. The bank they were going through changed their interest rate and the Loan to Value ratio of their loan.

BugEyedBimmer - back in the Saddle Dakota Leather > Reigntastic
03/17/2014 at 14:01

It seems to be the perfect solution, car-wise, for me.

Reigntastic > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 14:09

Pretty much the only Hybrid I'm aware of that comes with a manual, that alone elevates it in my eyes.

BugEyedBimmer - back in the Saddle Dakota Leather > Reigntastic
03/17/2014 at 14:26

I'm right there with you. I give it a pass on the sporty hybrid front for that very reason, and the handling. Handles beautifully.

Reigntastic > BugEyedBimmer - back in the Saddle Dakota Leather
03/17/2014 at 14:28

They're great looking cars too, in my opinion. I really would have preferred a CRZ that more closely related to the CRX, but considering what they decided to make, I think they did a great job. Besides, the amount of smugness it will give you to whisk by fellow commuters while in the HOV lane would be worth it alone.

BugEyedBimmer - back in the Saddle Dakota Leather > Reigntastic
03/17/2014 at 14:55

Well, the CRX always resembled the Civic of its time. I think the CRZ holds that tradition as well.

And I don't need smugness. I just need to not spend all day and night on the road lol

davedave1111 > BugEyedBimmer - back in the Saddle Dakota Leather
03/18/2014 at 17:04

Is there an advantage in having two separate loans? Normally a mortgage is a cheaper loan than a car loan. Can you take a slightly larger mortgage and buy a car with the money?

BugEyedBimmer - back in the Saddle Dakota Leather > davedave1111
03/18/2014 at 17:10

Does it work that way? O.o

davedave1111 > BugEyedBimmer - back in the Saddle Dakota Leather
03/18/2014 at 18:02

I think it mainly depends on how much equity you have. If you aren't borrowing your maximum, then in theory, yes. It's no different to borrowing a bit extra to put in a new kitchen or something (assuming a new kitchen doesn't add much value to the house).

In general, if you have any other loans at higher rates (and without swingeing repayment penalties) you're going to be better off rolling them all up into your mortgage.