I'm just beginning a search for my first property and I'm simultaneously in need of a vehicle to aid the process. I'm curious what the negative impact of buying a used car (all cash, upfront) would be on my mortgage application.
If I'm not financing the car, I won't be taking on any additional debt, so I don't think it should have an impact on my DTI. Though it will obviously reduce my available capital.
What is the potential damage to my eligibility here? Would it be better to borrow a car from friends or family and wait on purchasing my own until after closing on a home?
Real Estate Agent · Portland, OR · Member since 2016 · 1k+ posts · 605 votes
5y
Hey @David Antunes, if you are paying all cash for the vehicle it won't have any impact on your ability to get a pre-approval. Obviously, you won't have that cash available for a down payment or repairs.
Can you find a very inexpensive car to get you through a couple of years for now?
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
5y
@David Antunes Agreed with Brad, as long as your have enough cash for DP, closing and reserves, it shouldn't make a difference. You should be able to easily get an reliable used car for $5k or so.