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Tote-the-Note??


wc444's Avatar
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Join Date: Jan 2006
Posts: 4

01-05-06, 12:12 PM   #1  
Tote-the-Note??

I'm in the middle of arranging financing for a house. Unfortunately, my car died on me and repairs are not economical.

I need another vehicle ASAP, but was told that I shouldn't apply for any type of conventional financing while the home loan is being processed. I'm thinking of getting a cheap used car to keep me going until the house closes, at which time, I can finance a newer car through my bank.

Any idea if a tote-the-note car lot would be a good option or is this considered a conventional type of loan?

 
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jbrooks's Avatar
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01-07-06, 01:30 PM   #2  
jbrooks
The reason that suggestion was made to you is that your credit score can be affected negatively by multiple inquiries...thereby, if you apply for a car loan before your home loan closes, you may end up getting a higher rate on one or both loans.

Two things to consider: you can work with your mortgage company to see if they are going to need to pull another bureau, or if they already have the info they need (sometimes they'll pull another prior to closing to make sure you haven't taken on another big debt or filed bankruptcy). It is likely, however, that a dealership that finances in-house may pull a bureau anyway, which puts you in the same situation. Best solution: talk to the mortgage company and explain the situation, the underwriter may have a solution that will work for both of you.

Having the vehicle purchase may or may not affect your score negatively; taking on new debt can raise your potential debt-to-income ratio (as well as having too much new debt), which is bad. However, if you don't have much of a credit history adding a tradeline onto your report can be a good thing...again, it is a function of your overall FICO score (credit bureau) and the judgement of the mortgage/auto loan underwriter.

 
slickshift's Avatar
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01-13-06, 04:44 PM   #3  
As far as I know you can't do anything until the closing
Rent a car, borrow a car, take the bus, have a relative slip you a grand for a beater...
But you can't even put a beater on your credit card untill the closing
....I just went through this

I don't know what tote the note is, but if it's a buy-here-pay-here place, they check your credit and you can't do it

 
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