We are closing on a house August 1st............?

Question

The only other debt we have is secured in car notes. We want to purchase another car, and trade in one of the notes. (we will make 3K on the trade in).

If we purchase this car before Aug.1st would it affect our awesome credit rating and possibly raise any intrerest rates even if it was a fraction of a point.

(credit score is in high 700's)

Whatcha think?

Answer 1

Buying a car before closing can drop your score by a few points but not enough to change your rate. Where it can affect you is your debt ratio. If you are close to the line, adding another loan can reduce the amount of a mortgage loan you qualify for. I would wait until after you close.

K

Answer 2

You should put off any major purchases until after the closing.  Until you sign those mortgage papers, your interest rate is not set in stone.

Answer 3

If you want to get this house and have no problems don't even think of purchasing anything on credit at all.  Just wait until this whole thing is over, and then let her rip.  Just make sure you are able to pay the house note and all these additional big ticket purchases.  You don't want to overwhelm yourself with credit burdens that you can't handle, or is more than you need.

Answer 4

Shouldn't have any affect on your credit rating.

Answer 5

No. The credit score isn't based only on what you owe. It's formulated on ratios of what you owe as a percentage of income, along with a number of other factors.

If you have a credit score that high, I doubt swapping car loans will have any negative affect on your score.

Also, considering that the Fed recently held rats where they are, I doubt the lender will be trying to crank up your mortgage interest at this stage. You could ask for a lock-in now, if they offer it.

Answer 6

Oh YES!! Do NOT purchase anything big until after you close on the house. You don't want to jeopardize it!!

Not sure what Andrea is talking about, but if you have a fixed rate then it IS set in stone.

Answer 7

High 700's is generally rated Very Good.  But as to interest rates, there are several factors.  The the largest is the ratio of payments to income.  Others include savings of any type, rules the lender has, and if you are known to the lender.  One other is employment, length on job, position, and employer's view of your position and work.

Answer 8

It probably won't affect your score but making a major purchase right before closing on the house could affect your mortgage.  Debt to income is a big factor in your mortgage approval.  You don't want to increase the debt side.

Would this deal result in a smaller note and lower monthly payments?  Maybe. But check with your broker to see if this would affect the mortgage deal.