After getting a settled job, you must want to buy the house and car and secure your future. But you should not mix up those things. A house is a big investment for your future. So, you need to buy it first. But it is not at all true that You will have to stop your life and other demands just for buying a house. But after deciding on buying the house, purchasing a car is a big one. But if you want to go through the process of applying for a mortgage and closing it on the home, then you should reconsider your idea of purchasing a new car until the deal is finalized.
After getting a handsome salary in hands, many people want to improve their social standing in front of their friends and colleagues. So, they want to buy a house and a car at the same time. It is obvious enough. But You must know the fact that buying a car before purchasing a house can affect what the mortgage lender assumes you can afford to buy a home.
Car is a big item for buying. So, it naturally increases the ratio of your debt-to-income. From this, your lender will decide how much you can afford for mortgaging.
Above all, purchasing a car can reduce the amount that you can afford for your house.
Buying a house and car at the same time can be a good solution only if a person can trade in or sell the old car (used car) because that can not impact mortgage qualifying or the interest rate at all. Buying a car on credit right before some person buy a home can be the wrong decision because the additional debt can impact the debt-to-income ratio, can reduce the dollar amount of mortgage dollars for which person qualifies, or increase the interest rate that person is charged. The common solution is to buy a house, close the deal, and then buy a car.
Here are some important things that you should avoid before buying a house. Buying a house is undoubtedly a big investment. So, you will have to put your step carefully if you plan for BUYING A HOUSE AND CAR AT THE SAME TIME.
You need to show all the account statements that contain the liquid amounts or assets while your lender works on to decide your eligibility and other criteria for the loan. You should not move the money between your various accounts before buying a car. Your lender may want to see the documents for these. So, it is a great idea not to move money between accounts unless you buy a home or completed the process for a home loan as well. If you do this, you may need to submit all the additional paperwork.
If you change your bank in between purchasing the home loan, then you and your lender eventually deal with so much paperwork. So, it is a good idea not to change your bank until completing the process of home loan.
In the meantime, if you change your job, then it may create some negative effects on your home loan approval. You may need to submit your last two years of self-employment approval in order to process your loan. So, if you plan to change your job, then it is a smart idea to postpone the idea until buying the house.
If you have a good credit score, then you should not go through the bad inquiry. But the additional application for a credit card may put you in front of the question about your financial stability to buy a home.
The best solution is to avoid some big buying decisions until you get the loan approval for your home.