Closing soon / Need to finance car! Suggestions

[Givemeabreakplease]

I'm at the tail end of building a new house and due to some material delays, my closing has been pushed out until the end of October to possibly end of November. My builder has not given me a firm closing date yet.

 

Here's my dilemma: I need to finance a car for my soon to be 16 yr old daughter. This never would have been an issue if my house was on schedule. I should have already closed according to the original schedule but as I said there were some unexpected delays. I know that I cannot finance anything so close to closing but here are my questions.

 

Will my mortgage broker be able to tell me at what point it is safe to apply for new financing? ~~2 weeks before? I know some of my friends have had to provide documents less than 24 hrs prior to closing. I do not want to do anything that will jeopardize my house. 

 

I am assuming my mortgage will not start reporting until the month after my first payment, correct? I am sure my score will take a small hit with the inquiries for obtaining the mortgage but I am hoping it will not be much. I want to get the best possible auto financing. my mid score right now is in the 740's. 

 

Any suggestions or recommendations on how to proceed? 

 

Thanks

[cv91915]

Most of the time the mortgage company will soft your reports right at closing or right before funding.

 

There is no law that says you can't take on additional debt in the weeks/months leading up to a mortgage closing.  New inquiries and new accounts can introduce delays because they generally require providing additional documentation to an underwriter.

 

Talk to your loan officer and discuss the car purchase before you make it to avoid any potential DTI pitfalls (the new payment will impact your DTI), and to find out what the mortgage underwriter is going to need to see in terms of documentation on the car loan.

[monacho]

I once had a client who was buying a new home from a regional homebuilder that took around 4 months to be completed after he got approved.

 

He purchased a car a week before closing and the underwriter asked me "did he tell you he was going to do this before doing it?"  

I told her no and she declined the loan.  We placed it elsewhere and closed on time but it was a hassle.  Many lenders will pull your credit again in the final audit before funding your loan and you will have to answer for any inquiries.  Just explain the situation up front and make sure the lender is OK with you doing this.

Or talk to your 16 y/o and have her wait until after you close on the house.  If the inquiries drop your mid score below 740 there may be what is called a Loan Level Price Adjustment (LLPA) that causes the cost on your loan to go up.  I don't know what kind of financing you are getting, but if it's a conventional loan then generally the loan will cost 1/4 point more if your score drops below 740 unless you are putting more than 30% down.

[centex]

Your soon-to-be-16yo does NOT need a vehicle that requires financing.  If they have issues with it, then they need to learn something about being entitled...

 

A newly licensed driver SHOULD be content with a vehicle that can be had for less than $3K and a vehicle at that price point should NOT be something that is being financed.

[Givemeabreakplease]

Your soon-to-be-16yo does NOT need a vehicle that requires financing.  If they have issues with it, then they need to learn something about being entitled...
 
A newly licensed driver SHOULD be content with a vehicle that can be had for less than $3K and a vehicle at that price point should NOT be something that is being financed.

Thanks for chiming in and being oh so helpful. Not that it’s any of your business but my 15 yr old daughter is dually enrolled in high school and college. Her college campus is located in a less than desirable area and I want a good reliable car with lower mileage that she will be able to keep for many years. My daughter is anything but entitled and works her a*s off in school and volunteers at our local hospital.

I really make it a habit not to judge other people, especially when I have no idea what the extenuating circumstance might be.




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[centex]

There are PLENTY of "good reliable cars with lower mileage' that can be had without a car note.  Prudent fiscal management would have permitted such a purchase to be made without placing the home purchase at risk. 

 

The dual enrollment does not change the view on the matter...and I say that not only as someone who spends prudently but ALSO as someone that was in that same situation as a child (and had a full ride to a nationally known four-year school at the same time as I was entering my senior year of high school, a year that was done inside of about six weeks).  The vehicle that I bought for myself back then (with proceeds from summer employment) set me back about $2K and got me a ten-year old vehicle in good shape and that I kept for another five or six years before trading against something else.  Accounting for inflation, that same sort of situation still is a vehicle under $5K which is something that should simply be in savings anyhow... 

 

No newly licensed driver NEEDS a vehicle that requires financing. 

[maddkredit]

OP, I highly recommend you DON'T incur any new debt until your closing is done, and you have the keys to the house in hand.  Look on craigslist for a car you can pay cash for that will last until closing.  The lender will do a soft pull just prior to closing, no need to jeopardize your loan closing since you can finance a car if you wish after closing. Any new debt will bring scrutiny from the underwriter.

[hegemony]

did you delay the purchase? updates?

[cv91915]

1 hour ago, hegemony said:

 updates?

They sell sour cream now in a squeezable package!

 

 

Edited October 3, 2018 by cv91915

[IndyPoolPlayer]

23 hours ago, cv91915 said:

They sell sour cream now in a squeezable package!

Hey! A dollop of Daisy that sounds like flatulence!

[Captchaos145]

On 9/20/2018 at 2:15 PM, cv91915 said:

Most of the time the mortgage company will soft your reports right at closing or right before funding.

 

There is no law that says you can't take on additional debt in the weeks/months leading up to a mortgage closing.  New inquiries and new accounts can introduce delays because they generally require providing additional documentation to an underwriter.

 

Talk to your loan officer and discuss the car purchase before you make it to avoid any potential DTI pitfalls (the new payment will impact your DTI), and to find out what the mortgage underwriter is going to need to see in terms of documentation on the car loan.

This post is the only one the OP needs to read and pay attention to.