inception-app-prod/YjlmMGI5NzUtNWYxZS00NDA3LTkwYzEtNGEyODEyN2Q2YWQ3/content/2020/07/thecrickteam-10wnames.png
  • HOME
  • SEARCH THE LISTINGS
  • OUR LISTINGS
  • BUYING A HOME
  • SELLING A HOME
  • AREA SCHOOLS
  • ABOUT US
  • CONTACT
penny.crick@erafirst.com
812-483.2219
812-455-9450
Sign In
Sign Up
inception-app-prod/YjlmMGI5NzUtNWYxZS00NDA3LTkwYzEtNGEyODEyN2Q2YWQ3/content/2020/07/thecrickteam-10wnames.png
  • HOME
  • SEARCH THE LISTINGS
  • OUR LISTINGS
  • BUYING A HOME
  • SELLING A HOME
  • AREA SCHOOLS
  • ABOUT US
  • CONTACT
inception-app-prod/YjlmMGI5NzUtNWYxZS00NDA3LTkwYzEtNGEyODEyN2Q2YWQ3/content/2020/07/thecrickteam-10wnames.png
inception-app-prod/YjlmMGI5NzUtNWYxZS00NDA3LTkwYzEtNGEyODEyN2Q2YWQ3/content/2020/06/anastase-maragos-wwlm4zpyify-unsplash.jpg
Buyers

Don’t Buy a Car – or Did You Already Buy One?

inception-app-prod/YjlmMGI5NzUtNWYxZS00NDA3LTkwYzEtNGEyODEyN2Q2YWQ3/content/2020/06/5a06363a7c08-crickteam14nobackground113.png
Penny and Grodie Crick,01/5/2021

When Income Grows and You Want to Buy “Stuff”

When an individual’s income starts growing and they manage to set aside some savings, they commonly experience what may be considered an innate instinct of modern civilized mankind. The desire to spend money. Since North Americans have a special love affair with the automobile, this becomes a high priority item on the shopping list. Later, other things will be added and one of those will probably be a house. However, by the time home ownership has become more than a distant and hopeful dream, you may have already bought the car. It happens all the time, sometimes just before you contact a lender to get pre-qualified for a mortgage. As part of the interview, you may tell the loan officer your price target. He will ask about your income, your savings and your debts, then give you his opinion. “If only you didn’t have this car payment,” he might begin, “you would certainly qualify for a home loan to buy that house.”

Debt-to-Income Ratios and Car Payments

When determining your ability to qualify for a mortgage, a lender looks at what is called your “debt-to-income” ratio. A debt-to-income ratio is the percentage of your gross monthly income (before taxes) that you spend on debt. This will include your monthly housing costs, including principal, interest, taxes, insurance, and homeowner’s association fees, if any. It will also include your monthly consumer debt, including credit cards, student loans, installment debt and car payments.

How a New Car Payment Reduces Your Purchase Price

Suppose you earn $5000 a month and you have a car payment of $400. At current interest rates (approximately 8% on a thirty-year fixed rate loan), you would qualify for approximately $55,000 less than if you did not have the car payment. Even if you feel you can afford the car payment, mortgage companies approve your mortgage based on their guidelines, not yours. Do not get discouraged, however. You should still take the time to get pre-qualified by a lender. However, if you have not already bought a car, remember one thing. Whenever the thought of buying a car enters your mind, think ahead. Think about buying a home first. Buying a home is a much more important purchase when considering your future financial well being.

 

Print Details
Previous post
Next post
Writing an Offer – Safeguards Regarding the Property
Major Factors Influencing your Offer Price

Contact

The Crick Team- ERA First Advantage Realty LLC.4962 Lincoln Ave.Evansville, IN 47715
812-483-2219
812-455-9450
penny.crick@erafirst.com

Essentials

  • Home
  • Our Listings
  • Area Schools
  • About Us
  • Contact

Buyers and Sellers Tips

  • Buying a Home
  • Selling a Home

Consumer Protection & Privacy

  • DMCA Compliance
  • Accessibility
  • Each ERA Office Is Independently Owned and Operated.
  • © 2011 ERA Franchise Systems LLC. All Rights Reserved. ERA Franchise Systems LLC fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Each ERA Office is Independently Owned and Operated. ERA and the ERA logo are registered trademarks owned by ERA Franchise Systems LLC.
For ADA assistance, please email compliance@placester.com. If you experience difficulty in accessing any part of this website, email us, and we will work with you to provide the information you seek through an alternate communication method.
inception-app-prod/YjlmMGI5NzUtNWYxZS00NDA3LTkwYzEtNGEyODEyN2Q2YWQ3/content/2020/07/eragrayscale-2.jpg

© 2021 All rights reserved

Created with Placester

Sign in

Sign In
Forgot your password?
Create an account
You have been successfully logged in
The page will reload automatically.
Go to the homepage
Sorry something went wrong
Login or password are incorrect. Please try again.
Try again

Sign Up

Sign Up
Already a User? Sign In
You have been successfully registered
Please check your email.
Go to the homepage
Sorry something went wrong
Please try again.
Try again

Reset password

Enter your email address

Reset password
Return to Log In
Reset password email has been sent.
Go to the homepage
Sorry something went wrong
Please try again.
Try again

Change password

Change password
Sign Up
Your password has been successfully reseted.
Go to the homepage
Sorry something went wrong
Please try again.
Try again

Get in touch

A trustworthy real estate specialist on your side will make the transaction much easier and stressless.
Send
Success! Your message was sent!
Back to homepage
Oops! Error occurred.
Please try again.
Back to form
Already a User? Sign In

Account verification in progress

Please wait...

Account Verified!
You may now log in into your account
Go to the homepage
Error
Please try again.
Go to the homepage

Share this listing

Copy Link