When considering buying an automobile, there are so many choices it can be overwhelming. What is most important to you, gas mileage? Safety? Do you want a truck with a two package for those trips to the ranch? There are too many variables to list here and we certainly don't want to get into finding the best deal on a particular brand or model. But when it comes to financing you need to know how lenders look at your automobile loan.
As lenders calculate your debt ratios, typical debt will be your house payment, minimum credit card payments and other installment loans. If your debt ratios are too high, then you may not be able to qualify for the mortgage you want. Different debt is evaluated differently, especially so in regards to automobile financing.
Consider installment loans. An installment loan is a loan taken out to purchase or acquire a service or product with a specified monthly payment and term. For example, you may have a car payment of $500 per month with a five year term. Your lender will count that $500 monthly payment in your debt ratio. But any installment loan has a twist: if there are less than 10 months remaining on your installment loan, a lender won't count that debt against your ratios.
For example, that loan you took out to get a new washer and dryer? If your payments are $100 per month and your credit report shows the remaining balance as $800, then it's evident there are less than 10 months remaining on the loan. In this example, that $100 isn't counted against your ratios, helping you to qualify.
If your car loan is $500 and there is a $1000 balance, that's two months remaining. The lender won't count that, right? Maybe. If the loan is indeed an installment and there are two payments left the payment won't count against you. However, in the instance of an automobile lease, an underwriter will still count a car payment. Why? The underwriter knows that you don't own that car and you'll have to turn that car in at two months. Will you buy it outright? Will you buy a new ฝากขายคอนโด car?
In the instance of an automobile lease, be prepared to answer a few more questions to the underwriter' satisfaction if your lease is almost up. Those questions make sense; make sure you have an answer.
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