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Old 03-21-2019, 06:02 PM   #1
riceburner
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Anyone ever buy a CAR shortly prior to a HOUSE?

Hey all!

Hoping for some experience here...

Looking at a pretty screaming deal for a 2019 GTI Rabbit edition. You all know the fever you can get for a new car.

However, in about 6-8 months my fiance and I will be married and looking to get into a house. We project that we will have enough for a downpayment on the house - at least for an FHA loan, which has its pros and cons, of course.

I am also projecting that all my expenses, INCLUDING this new car, will be less than 25% of my minimum income. Week to week checks i ALWAYS work overtime and make a good chunk more, so really all in all my car payment and other expenses would be like 15-20% of my monthly income.

The big concern is, I've heard for years that creditors become quite picky about those who have 'fresh' loans and leases. Like they expect you to have zero current financial obligations short of the house you are pursuing. Kind of a nightmare.

Other random facts, I have a good credit history (and car credit history) no late payments ever, blablabla, i think my debt to income ratio is currently good and will be better by the time I am trying to get a house - which wifey will be putting her name on, too. We make OK money, maybe middle class or so? Not looking for a super expensive house, but around here, 250k is the minimum for something worth the investment to me.

Currently my cheap MK6 (and insurance, if creditors look at that??) costs around 300 a month. New car with insurance, around 500 a month. So not a HUGE jump, but I'd owe damn near 20k more than I currently do. What matters more, MONTHLY obligations, or TOTAL debt? Both??

In short, for those who DID buy a car or had a current loan of a somewhat higher # while house hunting, what was your experience? Idk, seems to me like anyone can get a house; people with student loans working at the dump somehow manage, even while having kids, but I dont like taking huge risks. Just really don't want to miss out on my one chance for a new, urano gray rabbit...

thanks for any insight!
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Old 03-21-2019, 06:54 PM   #2
GolNat
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I almost did but was glad I didn't. A long as your debt to income ratio is good it should not be a problem. That extra 200 a month could be put toward the "perfect house" that comes in 10k over your budget. A house is one of the biggest investments and imo one of the most important ones. Any extra money that could go toward the perfect one for your new wife is money well spent. Just my experience
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Old 03-21-2019, 07:01 PM   #3
GeorgiaBII
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Just don't. Priorities are key here. Houser first play toy last. And yes they do not want any surprises or issues when doing the loan.
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Old 03-21-2019, 07:09 PM   #4
Mk6Racing
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Debt to income ratio is normally the most common thing that lenders are concerned about. They may ask what that credit pull was for and as long as it is a normal/justifiable credit they donít really care about it.

But like others have said, donít buy the new car now if the plan is to really buy a home in 6-9 months. Having bought two homes, thereís ALWAYS unexpected expenses associated with moving and buying a house. Yes itís ONLY 200 extra per month, but itís almost double your current payment.

Iíd hold off on buying the car, plus I would never buy a new car to begin with #financialsuicide but thatís just me. Iíd rather buy a used car thatís maybe a year old with all the warranties etc for significantly less.


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Old 03-21-2019, 08:46 PM   #5
riceburner
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Thanks mk6racing. My wife talked me out of it. House first...

This car is stickered over 30k but selling for 25k so it's just a damn steal!! Used SE with performance package at 40k miles are going for like 23 or more around here so it's a huge HMMM moment
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Old 03-22-2019, 11:33 AM   #6
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Quote:
Originally Posted by GolNat View Post
I almost did but was glad I didn't. A long as your debt to income ratio is good it should not be a problem. That extra 200 a month could be put toward the "perfect house" that comes in 10k over your budget. A house is one of the biggest investments and imo one of the most important ones. Any extra money that could go toward the perfect one for your new wife is money well spent. Just my experience
Very well said GolNat. That shiny new car is a depreciating asset. Your house is not, buy a good one in a good area & enjoy the MK6.
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Old 03-22-2019, 11:57 AM   #7
sniper27
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I think as long as your debt to income ratio, as well as your credit is good, you should be fine. My wife and I bought our house while we had a car payment on an Audi A3 with zero issues. About a year after we bought our house, I financed my GTI with no issues either. I was still able to qualify for 0% financing with my credit score of 840.

That being said, I still agree with others, that if you don't need the car, don't do it. Focus on the house 1st and although you say your projected expenses are within 25% of your income, having a house comes with a lot of unexpected expense. You are better off saving the money on the new car for any home improvement/maintenance, unexpected repairs, home insurance, property tax, etc.
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Old 03-22-2019, 12:27 PM   #8
franco516
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if your current gti works fine and you dont NEED a new car then dont do it.
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Old Yesterday, 08:06 AM   #9
alpha3
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I agree with all the naysayers above, don't do it. Creditors do look at debt to income ratio but ones' FICO score is a biggie and that will drop for a while after you buy something. A house should always come first; it will also be an investment for you, a car is always going to depreciate. Like MK6Racing said, get something a year old or so, avoid the high prices.
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Old Yesterday, 10:46 AM   #10
riceburner
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Yep saving new car for later. I must stress though VW is GIVING gtis away right now, for like as much as used ones go for, it's like buying them at a depreciated value off the lot!
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Old Yesterday, 11:38 AM   #11
2012TP
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Quote:
Originally Posted by riceburner View Post
Yep saving new car for later. I must stress though VW is GIVING gtis away right now, for like as much as used ones go for, it's like buying them at a depreciated value off the lot!
Agreed. A urano grey rabbit is super tempting at what theyíre going for, but I just canít get down with the plaid seats
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