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Quick credit rating question

MtnRacer

MtnRacer

Veterinarian
Joined
Aug 15, 2002
Location
San Leandro, CA
Moto(s)
'05 636, '97 F3, '03 650 Prod, '02 MV F4
Name
McLovin
I'm planning to buy a house this year.

I'd like to finance a new bike too.

I'm not sure what my credit score is, but basically I bought a car with a consumer loan 3 years ago and have never missed or been late with a payment, and I got my first credit card roughly in the same time frame, and make all my day to day purchases with that. I never leave a balance on the card month-to-month. I have no credit history to my knowledge before these two items.

Basically my question is, if I finance the bike before I get the house loan, I'm worried it might affect my credit rating and thus the home loan rate which is far more important. Is that a valid concern? Will it work out better if I buy the home first and then the bike? I'm clueless when it comes to this shit.

Thanks!
Steve
 
Valid concern. I would wait until after buing a house to finance the bike since it will show up as another line of credit with a balance.

In the mean time you can buy my SV1000 :p
 
I'd be more concerned with the loan to value ratio, debt to income ratio, and stability of income. Having an existing loan isn;t bad, but you might have an issue if you try getting a loan a month or two after receving one.
 
^ What he said. I know with my score, it was taken into account how much credit (debt) was in use in comparison to how much I was authorized. So, if you've got cards/accounts allowing you $20k and you have $10k in use, it could make a dent in your overall score.

I also found myself having to write up an explanation of a credit check I authorized a dealer to make, but then I decided to wait to get a bike. I guess it made the lender uneasy, wondering if I was denied the loan for some reason.
 
+1 on Debt to income ratio would be a bigger concern if you pay all your bills on time. Especially if you are going for an FHA loan or don't have a ginormous down payment (<20%). A good credit score will get you a lower rate, the DTI determines how much of a loan the bank will give you. Btw, just because a bank says you can afford $X of a loan doesn't mean you should :).

I would hold off on the bike until 1 yr after you are in the new place unless it's a brand new home. Stuff breaks and needs repair the first year...like the sink disposal, the garage door spring, the entire master bathroom, etc etc. That plus the wife will want to decorate :kicknuts
 
MtnRacer said:
Basically my question is, if I finance the bike before I get the house loan, I'm worried it might affect my credit rating and thus the home loan rate which is far more important. Is that a valid concern? Will it work out better if I buy the home first and then the bike? I'm clueless when it comes to this shit.
Click to expand...

Any time you make a credit request you ding your score...so don't buy the bike (or get a preapproved loan) before you buy the house.
 
gnahc79 said:
...I would hold off on the bike until 1 yr after you are in the new place unless it's a brand new home. Stuff breaks and needs repair the first year...like the sink disposal, the garage door spring, the entire master bathroom, etc etc. That plus the wife will want to decorate :kicknuts
Click to expand...

Dunno about that...might want to get the bike while you still can. :laughing


:( I want a new bike :cry
 
I'm not a lender, credit or tax adviser, just going to share what info I have.


If you are a first time buyer, there is a loan available (FHA loan - 3% down). There is a first time home buyer tax credit of $8,000, you can use this for help with down payment, closing costs, etc. This tax credit is available, I believe, thru November of this year. You have to have a FICO score of 640+ to qualify for the FHA Loan.

Information lenders are going to want from you:

Bank Statements
Past 2 years W-2 and tax returns
Current Paycheck Stub
Copy of Drivers License
Statements of Investment Accounts (Retirement, 401K, etc.)
List of assets (cars, boats, motorbikes, valuables, etc)
There is other stuff but you get the idea.....


Some of the things lenders are going to look at when reviewing your credit are:

How many years have you had credit history (the longer the better).
How many credit accounts you have.
What type of credit (loans, credit cards, etc.)
Ratio of your revolving balances to your credit limits.
Any missed payments.
How many inquiries into your credit.


It is my understanding, one of the worst things you can do BEFORE you apply for a home loan is apply for other loans (vehicle, etc) and credit cards. It makes lenders nervous when there are applications for numerous types of credit in a short time frame.

If your serious about buying, get yourself a Realtor, I believe there is a BARF Moderator that is a real estate agent Yanabanana? Then find yourself a lender. They will guide you through this journey.

GOOD LUCK! :ride
 
If you want to live in Hayward, my neighbor's house is for sale at $349k

~1200 sq ft 3bd 2 bath
 
btw, this is my personal preference and know that others may disagree...

I won't ride again until I have ~6 months of emergency cash socked away :(. With a mortgage and a wife that stays at home to take care of our kid (soon to be 2), it would be pretty sucky if I took a spill, ended up not being able to work for X months, and have little cash to carry us over until I can work again.
At first I thought I would get a bike again once I saved up the cash to buy and can afford the monthly expenses (insurance, tires, etc). The emergency fund factor occurred to me just recently. Damn riding is expensive! :D
 
If you credit score is good, that's only half the battle my friend. Your credit history is very important too. Just because you make all your payments on time, doesn't mean lenders will have a favorable outlook on your credit. A big part of credit is how close are you to hitting your limit from month to month. As I recall, you shouldn't be charging more than 20-25% of your credit limit when purchasing items in any given month. If you continually go above that I believe lenders feel you are spending beyond your means to save up.
When it comes to financing a bike I would definitely hold off. I don't believe your credit score itself get's adversely effected, but as people mentioned above it's gonna hurt your debt-to-income ratio and other ratio's that lenders typically use to pre-approve you. Also, make sure you have your credit card statements on file, lenders typically (or so I heard) ask for the last 1-3years of your statements as I recall.
Either way. GOOD LUCK!!!
Move into a new condo and you will qualify for a 10,000 tax credit from Arnold (while funds last).
By the way... the FHA loan is good for people who dont have around 10-15% cash down or whatever the limit is... but take into account you will HAVE to pay for extra insurance depending on the loan size. You will have to pay this until you build enough equity in the home to cover that 10-15% or whatever it is (as I recall). Make sure to factor this into your mortgage payment when you make this calculation
GOOD LUCK!!

:thumbup :teeth
 
Same boat as you kinda. I am in the market for a Duc and a house. I want the Duc so much more than a house, but I have a wife. I am waiting to buy the bike afterward since debt obligation to income is like the main thing lenders look at along with credit score. Just buy the house now, get the $8k that they say Obama will give as a first time home buyer tax refund and use that to pay for the bike.

So what is the LTV% that the FHA loan needs to be without paying PMI? Is it 90% and less? Anyone know this?
 
Last edited:
Meter Man said:
How long have you been trying to sell that sv?:twofinger:)
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for serious? not at all, i need to put the work into it that will make it saleable (new fork seals and a cleaning), I've been super busy lately. :p
 
Med23 said:
So what is the LTV% that the FHA loan needs to be without paying PMI? Is it 90% and less? Anyone know this?
Click to expand...

20% to avoid PMI. Once you enter into an FHA loan with less than 20% you have to pay PMI for the first few years (~4 I think) even if you happen to plop down additional money to bring your LTV to 80%. Don't forget the UFMIP, which is ~1.5%-3% I think. Minimum down went up this year to 3.5% compared to 3.01% last year.
 
Med23 said:
Same boat as you kinda. I am in the market for a Duc and a house. I want the Duc so much more than a house, but I have a wife. I am waiting to buy the bike afterward since debt obligation to income is like the main thing lenders look at along with credit score. Just buy the house now, get the $8k that they say Obama will give as a first time home buyer tax refund and use that to pay for the bike.
Click to expand...
:laughing This is the exact plan I came up with at lunch today. Shame though, there's a VERY purdy bike on craigslist right now that is screaming my name. :( <sigh> Oh well, responsibilities and all that!

Steve
 
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