Car Financing Propects Being a Pro?

[x2ski]

Just finished a search and there was one semi-relevant topic that didn't get many reponses.

My wife and I are looking at buying a house next spring after I have my second year of poker-related income tax returns filed.

It is my understanding that a no-documentation mortgage can have very attractive interest rates (sometimes lower than a conventional loan) if your credit score (FICO) is pushing 800 (max 830). After doing some research, it seems as though we're going to want to have a zero balance on our credit cards (not a problem), get my wife's student loans down significantly (shouldn't be too difficult, but currently in the high $30Ks), and obviously have all other bills up-to-date (duh).

In addition, I read that it is good to have a "current" loan such as an automobile loan. My vehicles have always been purchased straight up, and my wife is leasing (I know... this was done before I married her /images/graemlins/tongue.gif).

So, where do I turn? My truck is a '99 Tahoe LT that blue books at about $8,500 for a trade, and I would have between $5k-$10k to put down. If I'm looking for a car at around $30k, that means I would need a loan of about $11,500-$16,500.

Any advice is greatly appreciated, and if anyone thinks this should be posted elsewhere, let me know (since this is somewhat poker-related, OOT didn't seem appropriate).

Thanks kids!

[Quercus]

I looked at a no-doc loan last year. With a decent credit score (720+ at the time), I had basically no problem getting approval for $200k -ish with nothing more than my signature stating my income and a note from my CPA indicating that I'd been self-employed for 2+ years. The rate was very competitive (I seem to remember is was a 0 down loan, 3 yr ARM, interest only option.)

Find a reputable mortgage broker in your area and give them a call. Lenders are (still) falling all over themselves to make home loans.

(I am not a poker professional.)

[x2ski]

[ QUOTE ]
I looked at a no-doc loan last year. With a decent credit score (720+ at the time), I had basically no problem getting approval for $200k -ish with nothing more than my signature stating my income and a note from my CPA indicating that I'd been self-employed for 2+ years.

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A note from your CPA? He just stated that you've been self-employed for 2+ years? No numbers? Did you have to indicate what your "self-employment" was?

[HDPM]

I think you are better off taking the money you would spend on the car and putting it on the house. With 40 K in student loans and only 5-10K in addition to your trade to put on a car I really don't think you can afford a 30000 car. If you have to waste money on a car to get a loan for a house you may have a problem. It makes no financial sense to do this. If it impresses a lender they have a problem. Shop harder for a loan.

[Randy_Refeld]

I would pull your credit reports and buy a credit score to see where you stand.

[Chamonyx]

Getting an 800 score is a pretty big deal - a very small fraction of the population have a score that high. If you have less than 10 years of good credit history, with significant issued but unused credit (>50K)then I would guess your chances of hitting 800 are zero (one of the credit agencies has a simulator that you can use to get rid of the guessing).

By all means get your credit house in order, but trying to manipulate your credit situation as you described seems like letting the tail wag the dog. Focus on getting the best possible mortgage with the details that you have - you can always refinance when your situation improves.

Good luck

[x2ski]

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I would pull your credit reports and buy a credit score to see where you stand.

[/ QUOTE ]

Just checked... Equifax says 704 (ugh). The main issue apparently was having a 46% balance/max ratio on my credit cards. That will be down to 20% or less in about a month, which apparently will increase my score, but I don't know what 704 can get me now.

[dogmeat]

FWIW, every time your credit score is pulled, you get dinged and your score goes down. If your score drops below 700, you will be almost unable to get that home loan on a no-doc.

I don't know of any no-doc. right now that is going to be anywhere near a good deal compared to a standard loan, even a no-down loan.

Getting your credit cards paid off is great, but the over-riding factor here is getting the amount you owe on each to below 30% of your credit limit on each.

Any loan officer that encourages a new debt (like a car loan) as helpful to qualifying for a home loan is an idiot.

Dogmeat /images/graemlins/spade.gif

[Randy_Refeld]

[ QUOTE ]
FWIW, every time your credit score is pulled, you get dinged and your score goes down.

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When it is pulled in applying for credit your score goes down. Pulling it yourself does not lower it also a company doing account reviews (a "soft pull") does not lower your score.

[Danielih]

I cant speak for car loans but countrywide and wells fargo, two of the biggest housing lenders in the country will loan any Las Vegas resident (I say las vegas resident because I assume the numbers are different for every city) with a credit score over 700 up to 400k with 5% down and up to 650k with 20% down on a house. Your outstanding debts and other ratios are not used in this type of loan. It is based on your credit score and nothing else. That is why it is called no doc. The rate given was not that good but for no doc it is hard to complain. They offered a 7/1 ARM at 6.75%. I know ditech or eloan offered a 7/1 ARM at 6.25 or so but they require some proof of income and assets.

[KaneKungFu123]

Most true pros will pay cash. Just ask Danny N.