buying car before mortgage

[holden]

I know that having car payments will make a differenence in the amount of mortage one is eligible for, but what about if you plan on paying for your car in cash.

I ask because I plan on purchasing real estate next year (which I will rent), but also want to purchase a new car (in full) in the next few months. I will have a downpayment of ~30% either way.

How much of a mortgage is determined by the amount of equity you own and how does having all of that equity in investments compare to having some of it in a car (I know it's decreasing).

[JordanLotoski]

Message El-nino. He will be able to answer all your questions

[holden]

thanks

[sputnik]

Originally posted by holden
How much of a mortgage is determined by the amount of equity you own and how does having all of that equity in investments compare to having some of it in a car (I know it's decreasing).

A car depreciates too quickly for banks to care about it when getting a mortgage.

If you have 30% down you should be fine for whatever the remaining 70% works out to.

[holden]

ok, so a mortgage is mainly determined by income, downpayment and credit/payments... do they even take the equity you own into consideration?

[sputnik]

Originally posted by holden
ok, so a mortgage is mainly determined by income, downpayment and credit/payments... do they even take the equity you own into consideration?

Not really.

However with 30% down the banks may not even care about your income.

The last mortgage I got (40% down) the banks didn't even care how much money I make a month.

[bspot]

The big difference is the cash you spend on the car can appear on the asset column of your mortgage application, but not so once you've bought the car.

Just talk to a broker/bank, see what you qualify for with and without that cash in one of your accounts.

[barmanjay]

I believe with more than 30% down the banks worry less.

anything over 20% is now a conventional mortgage and not insured by cmhc

[bignerd]

You are always better off to buy major items AFTER you get your mortgage-even if you are paying cash. You will need cash for the lawyer and closing costs etc... it looks much better to have $10,000 in the bank that it does to own a car outright on paper. I would wait unless this car is the deal of the century and can't be passed up.

[lint]

Originally posted by bignerd
You are always better off to buy major items AFTER you get your mortgage-even if you are paying cash. You will need cash for the lawyer and closing costs etc... it looks much better to have $10,000 in the bank that it does to own a car outright on paper. I would wait unless this car is the deal of the century and can't be passed up.

Blanket statement. OP has stated that if he buys a car, he will still have ~30% for a down payment. What information the OP provided leads you to assume that he won't have $$$ to cover closing costs after he buys a car? A guy who says he's going to pay cash for a car AND still have a 30% down payment should be given the benefit of the doubt that he's not a retard when it comes to money management.

[jonnycat]

Originally posted by lint


Blanket statement. OP has stated that if he buys a car, he will still have ~30% for a down payment. What information the OP provided leads you to assume that he won't have $$$ to cover closing costs after he buys a car? A guy who says he's going to pay cash for a car AND still have a 30% down payment should be given the benefit of the doubt that he's not a retard when it comes to money management.

:rofl:

[benyl]

The threshold is 35%.

If you put 35% down, the bank doesn't care how much money you make, how much debt you have or anything else.

Go ahead, buy your car.

[barmanjay]

Originally posted by benyl
The threshold is 35%.

If you put 35% down, the bank doesn't care how much money you make, how much debt you have or anything else.

Go ahead, buy your car. :thumbsup: