Unemployed applying for auto loan with my mortgage lender
I left my career temporarily about a year ago to take a break and write a novel. I plan on returning to work in about 3 months. Recently, I got in a fender bender and the insurance company decided to total my car. I'd like to buy a new car, but would prefer to do so via an auto loan rather than a full cash purchase to avoid making a significant dent in the savings I'm currently living off of. Just in case I need longer to finish the novel...
I know...I should probably get an old junker car until I'm back to work, but for reasons I won't go into here, I will be buying a newer version of the car that was totaled.
I'm curious if I apply for the auto loan, which will tell them I am unemployed, will this have any effect on my standing with them regarding my mortgage? I would hate to apply for the auto loan only to have them see that I am unemployed and then somehow disqualify me for my mortgage. I have never made a late payment in the 10 years I have had the mortgage, I have enough equity in my home to cover the price of the car I intend to purchase, I have an excellent credit history, and I have a co-signer for the auto loan who has the proof of income I lack in order to be approved.
Thanks in advance for your response.
Wed May 15, 2013 5:31 am
oldguy Senior Member
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No, it has no effect on your mortgage - that deal was made 10 years ago and you need only to coply with the contract, ie make the payments.
But I doubt that the lender will want to loan you the money to buy a new car, s/he has the fiduciary responsibility to lend money where there is a clear & demonstrable method of repayment.
As for the co-signer. I hope you'll rethink that, that is a terrible position to put someone in. Most friends hate to say 'no' - but they are really opening up their lives to lots of risk. Eg, if you go thru a red light, T-bone a car and kill a familly - then your co-signer becomes liable. In a Mult-million lawsuit, your insurance pays the $300,000 limit - and then moves on to 'deeper-pockets'.
Why not take your insurance payout and buy a good affordable car? And then later after you are back at work, trade it for a nice 2016 model of your choice.
Wed May 15, 2013 1:15 pm
coaster Senior Advisor
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