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Credit Union Pre-Approval Question

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I received a preapproval from my CU for "up to 56k". I am currently WAYYYY upside down on my current loan and asked the CSR if this amount could include the negative equity and if there was a cap on the% of LTV for the vehicle I choose. She told me that I could use the blank check for any auto purchase upto the preapproved amount and as long as the total financed price doesn't exceed the preapproved amount. They asked if there was going to be a trade and I told them that I was unsure...either trade or sell to individual. The CSR said that it didn't matter whether I traded it in or not...that they just asked that question.

 

So, I am very confused now...does this mean that I can actually get out of my terrible, terrible loan with Drive Financial and roll that horrendous amount of negative equity into the new car loan from my CU, regardless of the price of the new car I purchase, as long as I don't go over the pre approved amount?

 

I asked this same question to the CU CSR and she said yes...I was in such disbelief that I called back a couple of hours later and asked another CSR and they too said the same thing. I don't know if I'm just shocked that I was approved or if I'm missing something. Has anyone ever heard of this?

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You will probably have two options.

 

#1 your approval exists without the stipulation that you trade in your current auto loan for a vehicle worth up to 56K.

 

If tradeing then:

 

#2 your approval up to 56K will most certainly have an advance restriction, which will be based on the credit unions LTV guidelines for your application. Basically meaning that if you go out and purchase a 10K car, that draft from the credit union will certainly not be worth anywhere close to 56K.

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Thanks Marv..that's what I was thinking also.

 

I was just hoping that the negative equity could be rolled into the new loan and as long as the total purchase price didn't exceed the 56k then it would be ok...wishful thinking???

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depends on the amount of negative equity and the CU's advance restrictions.

 

Try to get the most bank for your buck.

 

Good Luck

 

and

 

 

CONGRRRRRRRRRRRRRRRRRATS!!!!!!!!!!!!!!!

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My credit union (San Diego County) apparently expects this type of thing to happen. On new and used car loans, they allow up to 120% LTV without any additional cost, and 120-130% LTV for 0.5% extra.

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Thanks Marv...and everyone else for thier replies.

 

I am still looking and trying to determine if I want to trade and use the loan pre-app or not. I really, really, really need to get away from Drive Financial and I will never be able to refi because I'm so upside down....BUT...I sure hate to roll it into another loan because I'll eventually have to bite the bullet and pay for the negative equity at some point. I'm trying to see how much I can come up with for a down payment to offset some of that negative equity....arghh...decisions, decisions. But, just getting the preapproval is a blessing. This would have NEVER, EVER happened without this wonderful board's guidance!

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Congrats! And at the same time you helped me as well! I am trying to trade down into a less expensive car. Currently with San Diego County Credit Union. I have had NFCU since a child but never really utilized them for anything. Think it would be best to try to use them for my trade down?

 

Currently owe about 40k on car. Its worth around 30k at dealer and I want a Car that will be around 25k. Hmm.. I wonder how much I can even save per month.

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Your welcome...I would certainly call them and ask about it...they are wonderful! I think they try every way possible to approve for what you want / need. I bet they'll approve you, especially if you've had a relationship with them for a while.

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I have had NFCU since a child but never really utilized them for anything.

 

I certainly would not publicize this fact. You're liable to get talked about! :P

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