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Posted in Auto Loans
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Shavvymomma

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auto loan for my teen
my teenage daughter desperately needs a car. I got pre approved for a $2000 auto loan, only my credit just improved (it was bad), and I am trying to buy a house within the next few months. How will this auto loan hurt or affect my credit score and my chances of getting a home loan soon?!?

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You can get a home without a credit score by visiting this non-profit group's website:  www.naca.com.

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Buy the house first, then buy the car

Every situation is different. Your credit will likely take a small hit in the short-term, but as you pay it off it will improve your credit score.

I'm not sure what your teenage daughter's definition of "desperately" is, but she can likely wait a few months. If she just needs one because all of her friends have one, then your goal of buying a new house is far more important. Also, if she is old enough to drive, she is also old enough to get a part-time job. If she functionally needs one to get to school, then that's another issue (but there's always the bus).

There are a lot of factors that come into play when the bank determines if you can afford a house. But primarily they look at your outstanding monthly loan payments to determine if your monthly salary is going to be greater than your expenses after you purchase your home. So if your monthly expenses when you have a mortgage will far exceed the added price with the car, then you will likely be fine.

The cheaper the car, the less negative affect it will have on your credit score as well.

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