135 Purchase in Limbo

[Terp1]

Ever since the 1 series came out I've been planning on getting it as my next car. I even got my wife to agree to it. She is currently finishing her Master's and will be done Sep. '09, so I planned on getting it through ED in Sep/Oct '09. It would be a win/win for both of us, I get the 1'er and she gets a trip to Europe.

Here's the problem: We've outgrown our house. We plan on putting our current house on the market in Spring of '10, hopefully selling it, and then getting a bigger house. The concern is if I get the 1 it will negatively affect our ability to get a house.

Should I wait until after we get the house? I don't know if I can wait that long. Help!

[ptack]

By itself, I don't think a new car will affect your ability to get a loan as much as whether you manage to successfully sell your current house and both of you have solid jobs (with enough income to qualify). If you're on the bubble, forget the car. You have about 7 months to decide.

[Terp1]

Thanks. I guess I'll have to see how it goes.

[imported_mega]

it will drop your credit score, how much it hurts depends on your score

my score dropped over 50 points, and has been going up 1 point per month

[Terp1]

50 points, ouch! Looks like I'm in wait and see mode.

[former]

I'm not an expert, but I'm not clear as to why a car loan would so negatively affect your credit score. Usually, when you are approved for a loan your credit score goes up as that is a positive indicator on your credit score. Your credit score is typically predicated upon your history of paying back your debts as well as how much available credit you are using vs how much you have (how much balance you are carrying). So as long as you are making your payments, that too, is a positive thing.

However, there may be a negative affect on your ability to get a home loan. One of the things they will look at is the percentage of your income which is available to pay for your home loan. If most of your income is taken up with payments on credit card debt (and they'll make certain assumptions based on your open balances) and car loans, etc. you may get denied for a home loan with a higher value than you may have now.

Of course, all of this is assuming that we don't all perish in the post-financapocalypse. :biggrin:

[Terp1]

Thanks for the sunny outlook. Over the next couple of months I'll probably talk to some banks and mortgage lenders and see what they say.