So lately I've been Battling over a decision. And I think this would be a good forum to voice my issues because my readers can help.
I want to buy a house... and a new car (to replace my lease). But I don't know which to get first. Or if it even matters.
First, the car. It's a saturn. I really like it, but it's not something that I would want to pay off when my lease is over. So, hopefully I can find a dealer that will buy out my lease and let me purchase a certified pre-owned vehicle from them (looking at BMWs and Acuras). So my total cost and monthly payments will stay roughly the same.
Then, there's the house. I'm tired of renting. I want some place to call my own. Location isn't set yet. Probably some place just over the line into PA (around exton or aston maybe?).
Now, here's where the issue comes in. I won't get a house until july because that's when my rental is up. And I'm starting to think about buying a car now in the next month. What I'm afraid of is that getting this car may hurt my credit and worsen my mortgage rate. On the one hand, my car loan would replace a pre-existing loan... so that should be ok. On the other hand, I know that one thing that can affect your credit is how recently you open a new loan or credit card.
So, does anyone actually know if buying a car now might hurt my chances of getting a house in the summer?
Yeah, I know... this was a boring post... but it's what is on my mind today.
Friday, November 10, 2006
Which came first, the Car or House?
Subscribe to:
Post Comments (Atom)
3 comments:
Buy ten cars, then weld the cars together into some sort of super car. Drive your super car to the real estate agency, where they will be overwhelmed by your coolness and probably just give you a house out of sheer awe.
I know nothing of such things.
I had to buy a car and a house in the same year! I bought the house first, and car later. I thought the car would last about a year after I bought the house, but unfortunately, it died. That was an expensive year.....
Definitely buy the house before the car, if you can swing it. And yes, Mr. C is right - definitely keep those cards current! Cars and credit cards are both forms of "bad debt" because you're not putting your $ towards anything that is an investment. A car depreciates in value the minute you buy it.
But things like a mortgage or a student loan are good debt because you are putting $ towards something that will appreciate in value, or that will help you make more money later on.
You can argue that you'll still have the car loan no matter what. And that's true. But, if you buy a car, you're probably going to put money down on it. If the bank sees that you have more money to your name, they'll see you as a better candidate for a mortgage. There's nothing that says you need to spend it on the house. The mortgage folks just want to see that you have the money to your name. It's how you get "pre-approved" for a mortgage.
If you rush out and put money down on a car, you have less money in the bank. For that reason alone, I'd buy the house before the car.
Or if you absolutely decide that you can't wait for the car, see if you can buy it outright. That way you're not carrying a loan at all going into the mortgage process. You're on the right track for wanting to buy a pre-owned vehicle. But even used BMW's or Audis can cost just as much as a new vehicle of another make and model. Is it really worth it to drive a fancier car? Not in my opinion.
Besides, you're young yet. You're not supposed to buy that fancy car until you hit your mid-life crisis. You're years away from that! :-) Drive a nice used, yet reliable, car, and put more money towards your house, which will be one of the biggest investments you'll ever make!
The last car I bought was brand new. But I wish I had bought a used one now. If you knew how much my vehicle is now vs. how much I paid for it, you'd cry for me. My house, however? It's appreciated so much in the 2+ years I've had it.
OK, that's your financial lesson for the day. Good luck with everything!!
Post a Comment