- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Credit Score Questions - Future home and car purchase
Posted on 8/10/16 at 12:32 pm
Posted on 8/10/16 at 12:32 pm
Wife and I are hoping to buy our first house in about 8-10 months, so I guess we will go through the whole qualification process in about 6-12 months or so. We will have a good bit saved up for more than a 20% downpayment, closing costs, possible HOA transfer fee, and a even some a small budget for new furniture.
We pay cards off every month and have paid down most of the debt we've had. We just have a little bit of 1 loan left at a tolerable interest rate. Also, we both have good credit scores (750+) per creditkarma and Amex.
Here is the problem. It looks like I will need to get a new car, kind of unexpectedly, within the next 3 months or so. I definitely have the cash, but with rates so low, I wouldn't mind taking out a loan for at least part of the car (~10k at a minimum).
How would this affect my home-buying situation? Will a new loan app bring down my score much? Also, I assume the new debt service would not be favorable for my potential mortgage qualification, right? Obviously, if I pay cash for the car, it would dip into my down payment savings. I could probably still afford 20%, closing, etc., but I wouldn't have much leftover.
On the same note, should we do anything with the other small loan that we still have? Its a student loan with a long horizon and pretty low interest so the debt service is minimal. I figured it was worth the good credit history to just keep paying it until after we get settled in the house. Any thoughts?
TL;DR - going to buy a house in about a year, need a car soon, whats the best approach for minimal credit impact?
We pay cards off every month and have paid down most of the debt we've had. We just have a little bit of 1 loan left at a tolerable interest rate. Also, we both have good credit scores (750+) per creditkarma and Amex.
Here is the problem. It looks like I will need to get a new car, kind of unexpectedly, within the next 3 months or so. I definitely have the cash, but with rates so low, I wouldn't mind taking out a loan for at least part of the car (~10k at a minimum).
How would this affect my home-buying situation? Will a new loan app bring down my score much? Also, I assume the new debt service would not be favorable for my potential mortgage qualification, right? Obviously, if I pay cash for the car, it would dip into my down payment savings. I could probably still afford 20%, closing, etc., but I wouldn't have much leftover.
On the same note, should we do anything with the other small loan that we still have? Its a student loan with a long horizon and pretty low interest so the debt service is minimal. I figured it was worth the good credit history to just keep paying it until after we get settled in the house. Any thoughts?
TL;DR - going to buy a house in about a year, need a car soon, whats the best approach for minimal credit impact?
3
Posted on 8/10/16 at 12:38 pm to kennypowers816
It's not the credit impact that you should be worried about....it's the debt to income ratio. Good luck!
Posted on 8/10/16 at 3:09 pm to kennypowers816
If you buy a new car and finance it and wait a few months, your score may actually go up, since you will still have pretty low utilization and you now have another form of borrowing on your report, with good payment history.
Just check your debt to income ratio. If one new car is enough to throw it out of whack, that is a sign that perhaps you need to look for a less expensive house, or wait on the house.
Remember that the ratios are there because they target the ability to pay the mortgage. You can't drive a car forever, at some point you will need to buy one.
I'd hang on to my cash. Things are ALWAYS more expensive than you think they will be, especially your first purchase.
Just check your debt to income ratio. If one new car is enough to throw it out of whack, that is a sign that perhaps you need to look for a less expensive house, or wait on the house.
Remember that the ratios are there because they target the ability to pay the mortgage. You can't drive a car forever, at some point you will need to buy one.
I'd hang on to my cash. Things are ALWAYS more expensive than you think they will be, especially your first purchase.
Posted on 8/10/16 at 3:16 pm to kennypowers816
Credit inquiries older than 6 months have little to no impact on your mortgage FICO score.
If you pay your credit card in full before your statement period ends to report a $0 balance, that is the best way to improve you credit score.
Your creditkarma/CC statement/free credit score does not give you the FICO score used in mortgage decisions. Credit Karma uses the FICO 8 or 9 model that is typically ~50-75 points higher.The only official score can be found for a fee from the company that generates the scores FairIsaac on myfico.com look for a package with the mortgage scoring model
If you pay your credit card in full before your statement period ends to report a $0 balance, that is the best way to improve you credit score.
Your creditkarma/CC statement/free credit score does not give you the FICO score used in mortgage decisions. Credit Karma uses the FICO 8 or 9 model that is typically ~50-75 points higher.The only official score can be found for a fee from the company that generates the scores FairIsaac on myfico.com look for a package with the mortgage scoring model
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News