does paying extra payments of a car loan help in getting a home mortgage?
pregnancyquestion asked:
I have 11 months left in my car loan. I was told that if I pay a few extra payments, the debt will not be considered when I try to get a mortgage.
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I have 11 months left in my car loan. I was told that if I pay a few extra payments, the debt will not be considered when I try to get a mortgage.
January 30th, 2009 at 4:59 pm
If that is what your loan officer or financial institution told you then go by what they say because each bank/lender is different and look at different criteria on applications.
January 31st, 2009 at 1:25 pm
buying a home really depends on yor credit score and time on the job. How you make your payents come in 3rd.
The only thing making extra payments will do is help cut down the interest rate, with 11 months left should help you a little bit.
February 2nd, 2009 at 1:28 pm
Typically any debt with 10 months or less to go on an installment loan doesn’t have to be included in figuring out your monthly debt obligations. That’s not true if it’s a lease however, only a loan where you will own the car at the end.
It’s absolutely true and acceptable to almost all lenders.
February 4th, 2009 at 2:58 am
Some lenders will not consider installment payments with less than a year to run as counting against your debt to income ratio for purposes of seeing if you qualify. Others will wait until the final payment is made and verified. So it varies.
I’d be very certain before I paid such a loan off or down that I wanted that loan and was going to get it. If you pay it down, or off, and then you don’t get this loan, you’re not going to be able to get the cash back if you need it for your next loan application, either as reserves or down payment.