How to Keep Your Car Purchase From Derailing Your First Home Purchase
Hello again and welcome to Houston First Time Home Buyers Edition. Today we're talking a bit about how to keep your car purchase from derailing your first home purchase.
While it would be best to wait until after you purchase your first home to buy your car, you may not be able to wait and need to get transportation now. So, if you are in the market to purchase a home but looking to purchase a car as well, here are a few thing to keep in mind so that your car purchase does not lower your credit score and derail the purchase of your new home.
A single submitted car loan application could potentially lower your scores up to 60 points or more.
One car loan application submission can trigger as much as 25 or more hard inquires on your credit, depending on how many third-party-lenders the dealership work with.
Car dealership does not run credit multiple times, however within the application you completed, you gave the dealership permission to submit your application to all the lenders they work with and each of those lenders will pull their own credit report.
Even if you have the funds to purchase the vehicle out right, you may still be required to complete a credit application and have your credit run. Why? because dealerships have to follow protocols laid out by the federal government to confirm the identity of all buyers who pay cash for a vehicle.
You can always ask the dealership to run your credit only once to avoid multiple hit, or get financing from your bank or credit union before going to the dealership.
Also, if you are purchasing a new car, it is unlikely that the dealership will use outside lenders. Typically, outside lenders are popular with used car sales.
If a car dealership run your credit without your permission, you can file a complaint with the Consumer Financial Protection Bureau.
As always, thank you so much for stopping by. Remember, if you are thinking of purchasing your first home, please contact us. We are here to help. We have been helping Houston first time home buyers since 2011 and we can help you. I hope you have an amazing day. Until next time...Diana
