New Debt and Refinancing Issues
Let’s say you’re a good borrower. You pay your bills on time, you are buying your home, and you now want two things. One, you want to buy a new car ( or something similar in cost ) and you also want to refinance your home sometime soon. Would buying that new vehicle impede your chances of getting a good refinance later on?
Anyone considering a refinance should understand that for the most part the ability to qualify for a refinance is based on your credit score, your credit history, your income level, and your employment history. Consumers who have good marks on the above issues should not run into trouble when seeking a refinance.
As a side note, because credit reporters and credit scores are so important in the decision making process, consumers should always get a fresh copy of both before seeking new financing. This will allow you to correct any mistakes on the reports and will also give you a sense of where you are before you talk with a lender.
Normally, if you want to purchase a vehicle or something of high dollar value and refinance your home you would do much better to space the loan applications out. It is usually not a good idea for a lender to see two applications being processed too close together in time. The better way to do it is to get your vehicle and then pay a few months on that loan. This lets the lender see that you can handle your obligations.
The truth is most homeowners have a vehicle payment of some type. This is not uncommon and as long as your debt to income ratio does not go ballistic the purchase of the new item be it vehicle or something else should not cause problems with the refinancing as long as you are able to make the payments.