How a New Car Payment Reduces Your Purchase Price
If you’re in the market to buy a home, buying anything as expensive as a car is a no, no. Even if you feel you can afford the car payment, mortgage companies approve your mortgage based on their guidelines, not yours.
Can I Buy A New Car If My Mortgage Has Already Been Approved?
Let’s say you have a contract to purchase your new home and already been fully approved for financing. Your down payment is made and now you’re just waiting for the closing date. You decide to go out and buy a new SUV to assist with the move and take up space in your new 3-car garage when you move in.
What most buyers don’t realize is that if the lender will see the new car purchase when he checks your credit report right before closing. When the lender sees that on your credit report he can deny your purchase at the last moment – it’s happened many times. Now you have a car, no home and you could be out the deposit depending on your contract terms.
The moral of the story is, “don’t buy a car when you are in the market for a home until long after you have closed and moved in.”
Buying a home is a much more important purchase than a car when considering your future financial well being.
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