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WarEagle062213

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Should I refinance my auto loan before getting a mortgage pre-approval
My wife and I are about to shop mortgage lenders and get a pre approval letter. Would the hit on our credit score be worth the $40-$50 decrease in payments each month if we refinance our vehicle before we do the pre approval? The interest rate on our auto loan is 9% at the moment and we purchased the vehicle a little over a year ago. We both have between an 677-683 credit score between all reports which is considered "fair".

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Unless you wouldn't mind living in the car rather than having a roof over your head, I strongly advise you to put the auto refi on hold. This very well could and probably would jeopardize your success with a mortgage loan. You should never open any new accounts within six month to a year when getting ready to apply for a mortgage. Also, understand that mortgage lenders are not going to use the scores that you get here at Credit Karma, the mortgage lenders will use a version of FICO scores, so you should check them to see where you are at if you haven't done so yet.

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