Buying a car while refinancing our home

[D_McG]

We are refinancing (better rate, lower payments - not pulling cash our or anything like that) and now my car died and it's just stupid to put any more money into a 12 year old 190k mile car (they need $1100 to get it running again and we JUST put $1,600 into it .

We are debating getting a car loan this time - just a small one maybe $3k (rest in cash)so we can afford a more reliable car. But I am afraid that if anyone runs a credit check on us then it will disrupt the refinancing process. Is that true? As far as our refi - we are 'locked in' to a rate.. have signed papers and the loan is 'in underwriting' and will be there for about another week. Then I guess we close. We have great credit.

Anyone know?

Thanks!

eta: would rather not wait b/c it's difficult for us to live with one car. DH often needs his all day for work and we live in rural PA.

[FondestBianca]

DO NOT charge anything while your refi is still in process. Not until it is funded and recorded should you venture to use a credit card or take out a loan such as an auto loan. Try to stay on a cash and debit basis only while doing a refi.

If there is any issue with the approval of the refi (there most likely will be even if they say the process is simple ) they may very well have to update their info and in that case they would find any new purchases. If they cannot do the refi with your new debt to income ratio and you cannot resolve that and get your debt to income back down where they want it your refi may notbe approved. The underwriter has the task of getting things in order for bank approval. Your loan officer is just a middle man. Just because they say,"this is all we need. this will work. this is fine, easy, good." it is the underwriter who is dealing with getting bank creditor approval. Theres a good chance that one or more times after your agent says, "I have everything I need from you." he will come back and say, "ok, well now they want to see this...".

hold off buying until the refi is signed, funded, and done. Funding takes place 3 business days (including saturday) after you sign the final papers and they are submitted.

also: underwriting is still 3 steps from close. after underwriting is done they will let you know if there is any more info needed or any more things needing to be done for approval by the creditor. Once THAT is done you will be called into probably an real estate attorneys office to sign final papers (the same HUGE stack you signed when you origionally bought your house). They should submit the papers as soon as you sign and it takes 3 days after that to be done. They are legally bound to have it done within 3 days. The papers you sign when you lock into a rate are more for the lenders office so they can legally screw with your finances and personal business and gaurentee your percentage lock.

[D_McG]

FondestBianca - thank you very much. That's lots of info I wasn't aware of!

[MCsMom]

I'd get a rental car with cash for a week or two, or beg, borrow, steal from friends relatives till it was closed to deal with the car situation.

[FondestBianca]

in addition to my earlier post. Dh and I did an FHA streamline refi. We locked at 5% and didn't actually end up getting called into the attorneys office to sign until the 30th and final day of our lock (locked rates expire after 30 days). Our simple refi took seemingly forever. :

[CarrieMF]

Originally Posted by MCsMom

I'd get a rental car with cash for a week or two, or beg, borrow, steal from friends relatives till it was closed to deal with the car situation.

only do this if the rental place won't pull a credit report.

as hard as it is with only 1 car, it's only 1-2 weeks so I'd deal with it.

[D_McG]

Originally Posted by CarrieMF

only do this if the rental place won't pull a credit report.

as hard as it is with only 1 car, it's only 1-2 weeks so I'd deal with it.

I hope it's that short. We'll deal though for sure. I'll offer to host playgroup here weekly... invite people over for playdates, etc. If I just had one kid it would be easier but most of my friends don't have cars big enough for 3 carseats. (ie - my two and theirs)

Thanks again!