Should I pay off my monthly $322. car loan before I apply for a mortgage loan? I owe $4200. w/18 more pymts?
I'm trying to determine if paying off the $322.00 payment will make that much of a difference on a new loan or if I should just keep the money in my savings for a rainy day. On a sad note, I'm considering divorce.
- 1 decade agoBest Answer
Well here is how credit works.
It would definitely help you out if you paid off your car loan because it would show that you have a lessor debt.
Just like your credit cards, people don't realise that if you even had a $500.00 dollar credit card with a $500.00 dollars owed it would hurt you more then if you had a $5000.00 dollar credit owing $1000.00 dollars on it.
The reason being is that even though you would owe 500 dollars more with the higher credit card it shows on the smaller card you are 100 % in debt <<<< I hope you understand that.
Now Another way credit is looked at is Possible debt. If you have a $20,000 dollar credit card it shows that you could possible have that debt and that could also hurt you as well even if you didn't owe 1 single penny on that card.
I understand you didn't ask for all of this but just wanted to inform / help you out a tad bit more.
Now If you have established your credit build on this car payment and have the money to pay off the car I would do it, Only for the simple reason is its going to save you interest and $322.00 dollars a month. That's a lot less for you to worry about if you get this loan for your house.
- scottFL007Lv 61 decade ago
OK, there's a lot of different issues here. First, the other answerer was right about waiting until you've resolved the divorce issue. That might change some things. The last thing you want is a mortgage in joint names after a divorce. And, if you can qualify for the mortgage in your name alone, that will probably be true later, too.
As to the car, paying it off will reduce your monthly obligations. That would help you qualify. On the other hand, having more cash to put down will also help you qualify. You really need someone to evaluate it all for you. Sit down with a loan counselor, and they can probably help you consider whether to pay off early or not. Either way, it;'s always nice to have less debt.
- 1 decade ago
if the car loan is due then u should pay for but if u just want to increase ur chance of the mortgage loan i dont think it will help? But maybe u should concentrate on ur marriage!
- How do you think about the answers? You can sign in to vote the answer.
- bettysLv 41 decade ago
why would you want to have a mortgage now? you need to wait until you decide if a divorce is going to happen. what ever is there ,you and your mate will have to split it.
- Anonymous1 decade ago
well it sure wont hurt you when it comes down to going to the bank and try to ask for morey money
- Anonymous1 decade ago