Car payment and mortgage question

[twinmomma]

I'm planning to sell my current home and buy a new home in January/February. But, I also know that I need a new car in the not so distant future. We've outgrown my car, mileage is racking up, and I'm tired of fixing it.

I just found an incredible deal on a used car that's the exact model I want, super low mileage, and can get an interest rate on financing of about 2.75%. 

Currently my only debt is my monthly mortgage payment. I have no student loans, no credit cards, no car payment, etc. 

Will adding a car payment hurt me tremendously before trying to do the whole new mortgage thing in the new year? 

For the new mortgage amount, debt to income ratio would be 28%. Adding in the car payment, I'd be at 33%. 

[suzubell]

I would do it. You don't sound like a terrible debt risk.

[Cappy]

I'd just call your mortgage broker to give the numbers and get their feedback. We ran some hypothetical #s by our broker and they were super helpful in advising which was better lending wise.

[tealblue]

I think it would be fine. I bought a new car one August and then decided to refinance our house that December and it wasn’t an issue.

I think the main issue is doing it like during the buying process.

[madisen]

A 33% DTI is fine for most loan programs. Throw in a great credit score and I don’t see the issue. However I like the idea of speaking with your broker to run some numbers and make sure that the loan amount you’d qualify for fits with your price range when house hunting.

[twinmomma]

Thanks! I reached out to the broker and he said it would be fine. Was able to even negotiate down another $5k today so I went for it!

[fryjack2]

Nov 4, 2020 16:01:11 GMT -5 twinmomma said:

Thanks! I reached out to the broker and he said it would be fine. Was able to even negotiate down another $5k today so I went for it!

another 5k off a used car? That's impressive! Now I want to know what kind of car

[twinmomma]

It's a 2019 Highlander, 7500 miles, MSRP was $35k and I got it for $25k!

[ellipses84]

I think it will be fine. That’s considered good debt with a payment history so in a few months there may be no difference. DH’s credit score dropped when he paid off his student loan a few months ago because he doesn’t have any loans like that anymore.

ETA: saw you did it. That’s an amazing deal! Slightly used SUVs for Toyota or Honda are so hard to find.

[lemoncupcake]

Nov 6, 2020 8:12:15 GMT -5 twinmomma said:

It's a 2019 Highlander, 7500 miles, MSRP was $35k and I got it for $25k!

Dang. Do you offer car buying consultant services? That's a great deal.

[twinmomma]

Nov 7, 2020 8:44:01 GMT -5 lemoncupcake said:

Nov 6, 2020 8:12:15 GMT -5 twinmomma said:

It's a 2019 Highlander, 7500 miles, MSRP was $35k and I got it for $25k!

Dang. Do you offer car buying consultant services? That's a great deal.

Honestly, I think it just came down to the fact that I wasn't desperate for the car, so I walked away and told them I'd think about it. The sales guy was new and freaked out so he called me back to offer whatever price I wanted.