Question for Financial Gurus....

[BigZak]

Yes and no. Usually there is a time limit. Thats why they say don't make any purchases until you close. Everything can potentially change from time of quote till time of closing.

...thanks brah...it never clicked til now that alot of small purchases...like gas for a few months can add up to a big one! doh!!!

[BacktoBasics]

A "recreational" loan?

I know there's a joke in there but I'm serious.

Like for an RV?

A recreational loan is

Boat
4 wheeler
RV
Some times Motorcycles
Water Craft

and stuff like that.

Those rates are higher than what you get on Cars and Homes but thats why they have induced scores in the Auto and Home world. Its far far far different having a raw score pulled from your home than it is when an Auto dealership pulls it.

Just ran a simulator on my credit here is an eye opening example.

I have 2 credit cards I've used recently because I was in a pinch.

1k limit on one and 800 limit on the other.

1,000 had 415 on it
800 had 380 on it

Transunion had my score at 694

if I pay the cards down to 300 and 300 my score jumps to 721 in real time.

According to the rate sheet from Bank of America

675-699 6.49%
700-740 5.25%

On a 30k purchase thats a 1,020 dollar difference over 60 months and it would have only costed me 195 dollars to qualify for the better rate. No one pays attention to this stuff.

[BacktoBasics]

You guys probably also didn't know that a paid Time Warner collection for 300 buck listed as a zero balance charge off has the same negative impact as if the collection was never paid. Cargeoffs are nearly as bad as having the unpaid debt and for 90% of the banks out there its an automatic disqualification for Lock in approvals.

[BacktoBasics]

You guys probably didn't know that unpaid child support through any state is far worse than a bankruptcy.

[ashbeeigh]

And just fyi if any of y'all are behind on house payments, have an adjustable rate that is going to reset soon or anything of that sort PM me or let me know I can probably get you hooked up with a counselor who can take care of it.

[BacktoBasics]

And just fyi if any of y'all are behind on house payments, have an adjustable rate that is going to reset soon or anything of that sort PM me or let me know I can probably get you hooked up with a counselor who can take care of it.

What does this counselor offer? Who is it? There are a lot of very dangerous things that counselors can get you envolved in. If you have Credit Counseling and there is a payment plan for those of you who have used that type of service...the CCC or like. When that shows up on your credit report its a huge red flag that sticks with you almost as long as a bankruptcy. CCC being a good example Consumer Credit Counseling. If they show up on your credit report you can't qualify for prime notes for a minimum 8 years from initial set up.

There are however some counselors that do the right thing and it never shows up on your credit report but they are few and far between.

[ashbeeigh]

What does this counselor offer? Who is it? There are a lot of very dangerous things that counselors can get you envolved in. If you have Credit Counseling and there is a payment plan for those of you who have used that type of service...the CCC or like. When that shows up on your credit report its a huge red flag that sticks with you almost as long as a bankruptcy. CCC being a good example Consumer Credit Counseling. If they show up on your credit report you can't qualify for prime notes for a minimum 8 years from initial set up.

There are however some counselors that do the right thing and it never shows up on your credit report but they are few and far between.

I'm just doing the outreach. They're all HUD certified and go through the banks loss mitigation department. There's a National grant provided by the federal government for us and our sister organization to do Housing counseling throughout the country.

http://www.acornhousing.org

There's a form there that explains the whole program.

[Das Texan]

I should stop paying my mortgage just so I can get a get out of jail free card like so many of the other morons in this nation who are getting one.

[BacktoBasics]

I should stop paying my mortgage just so I can get a get out of jail free card like so many of the other morons in this nation who are getting one.

Its not quite that easy. Nothing comes without reprocussions.

[ashbeeigh]

I should stop paying my mortgage just so I can get a get out of jail free card like so many of the other morons in this nation who are getting one.

check your PMs.

[Das Texan]

Its not quite that easy. Nothing comes without reprocussions.

oh its totally tounge in cheek, unlike the 90% of the morons out there who dont read , I know what I get myself into and dont rely on big brother to help me out because I cant read .

Its also the lending companies fault too because they are greedy bas s and made idiotic loans in the first place and they also are looking for said get out of jail free card.

Awesome financial world we are living in right now!

[Nbadan]

It was $14,000. You all over estimate me.

Your paying $335 for 72 months on a $14K principal loan and I'm the one who doesn't know what he's talking about...

[ashbeeigh]

Your paying $335 for 72 months on a $14K principal loan and I'm the one who doesn't know what he's talking about...

oh. haha haha.

[Clandestino]

You could not have just given any worse advice. You're the kind of guy that probably thinks that simply making timely payments will ensure a strong credit rating. Horrible advice here. Being that I work in retail and finance and work hand in hand with many national lenders and local I can tell you first hand your advice sucks.

People who give a should be keeping tighter tabs on their credit. I have like most people a very common name. Its never a bad idea to be able to keep up to date information on one of the most influential aspects of your purchasing life.

Other than your free report which does not give you a credit score it costs roughly 25-30 bucks to pull a bureau with score and thats just one time with no updates and there are 3 different bureaus all with different information and all with different scores. Do that once for each and then once again to follow up if you are trying to get something removed or changed and you've nearly spent the same amount of money you could have spent to simply be able to access all three with scores each day.

Half the problem with people making large purchases is that they have no clue how to prep their credit for a big buy. Its not as easy as just making timely payments and it'll all work out. You have to be smarter than that expecially with how tight the banks are getting right now and even more so if you have a lot of revolving debt.

I see people with good credit everyday that could have earn way strong rates and terms had they simply preped their credit for a purchase. Such foolish arrogant people who know nothing are the ones that pay more and have no idea they could have done better.

You are an absolute fool to think its not beneficial to be able to access your credit file at any given moment. Thats why people have such a hard time making purchases.

I love the forum subprime lender giving advice! haha

[BacktoBasics]

I love the forum subprime lender giving advice! haha

I love even more how the arrogant posters here, who know nothing, love to hand out bad advice on top of bad advice.

[RandomGuy]

The real question is not whether to send in an application (what does it cost you to do that?), but whether or not the lower rates in the long run save you the short-run costs of the refinancing charges.

I've never refinanced a car before, but I assume it's the similar to a mortgage. With those, because you're paying off over 15-to-30 years, a small drop in percentage leads to a large net dollar savings. Paying off a car over 5-to-6 requires that either you refinance at a significantly lower rate, or that the refinance costs are not huge.

There are lots of refinancing calculators on the net you can use to figure out what you would need to have in terms of rate change vs. finance costs to make sense. The ones I've seen are for mortgages, but you should be able to use them for car loans.

Actually applying for a lot of credit in any given year DOES negatively affect your credit score somewhat.

http://www.bankrate.com/brm/news/cre...20031104a1.asp

1. How you pay your bills (35 percent of the score)
The most important factor is how you've paid your bills in the past, placing the most emphasis on recent activity. Paying all your bills on time is good. Paying them late on a consistent basis is bad. Having accounts that were sent to collections is worse. Declaring bankruptcy is worst.

2. Amount of money you owe and the amount of available credit (30 percent)
The second most important area is your outstanding debt -- how much money you owe on credit cards, car loans, mortgages, home equity lines, etc. Also considered is the total amount of credit you have available. If you have 10 credit cards that each have $10,000 credit limits, that's $100,000 of available credit. Statistically, people who have a lot of credit available tend to use it, which makes them a less attractive credit risk.

"Carrying a lot of debt doesn't necessarily mean you'll have a lower score," Watts says. "It doesn't hurt as much as carrying close to the maximum. People who consistently max out their balances are perceived as riskier. People who never use their credit don't have a track history. People with the highest scores use credit sparingly and keep their balances low."

3. Length of credit history (15 percent)
The third factor is the length of your credit history. The longer you've had credit -- particularly if it's with the same credit issuers -- the more points you get.

4. Mix of credit (10 percent)
The best scores will have a mix of both revolving credit, such as credit cards, and installment credit, such as mortgages and car loans. "Statistically, consumers with a richer variety of experiences are better credit risks," Watts says. "They know how to handle money."

5. New credit applications (10 percent)
The final category is your interest in new credit -- how many credit applications you're filling out. The model compensates for people who are rate shopping for the best mortgage or car loan rates. The only time shopping really hurts your score, Watts says, is when you have previous recent credit stumbles, such as late payments or bills sent to collections.

"Then, looking for new credit will be seen as an alarm because statistically, before people declare bankruptcy and default on everything, they look for a life preserver," Watts says. Also, if you have a very young credit file, an inquiry can count for more than if you've had credit for a long time.

[BacktoBasics]

5. New credit applications (10 percent)

The final category is your interest in new credit -- how many credit applications you're filling out. The model compensates for people who are rate shopping for the best mortgage or car loan rates. The only time shopping really hurts your score, Watts says, is when you have previous recent credit stumbles, such as late payments or bills sent to collections.

"Then, looking for new credit will be seen as an alarm because statistically, before people declare bankruptcy and default on everything, they look for a life preserver," Watts says. Also, if you have a very young credit file, an inquiry can count for more than if you've had credit for a long time.

That is not entirely accurate, somewhat but not entirely. Although multiple pulls from one central agency typically can be consolidated. I can easily shotgun someones credit. Give me 3 days and I can lower your score by 30-40 points simply by shopping you from bank to bank. I can take you from earning 4.99 to just barely qualifying for 8.99 in 72 hours.

Its one of the oldest tricks in the book.

Get a customer that makes you the first stop and they aren't going to buy right then and there because they want to keep shopping. Simply tell them to go ahead and fill out the application to see what the rate will be. That way we can lock the rate in :winkwink: If a few weeks down the road they decide to come back the rate and deal is already in place...how wonderfully convienent. Then send their credit to every lender available and lower their score so the next few dealers are unable to secure as low a rate and they'll likely come back to you thinking you got them the better deal.

The rest of that post is spot on! Thanks for posting it.

[RandomGuy]

Thanks for the help y'all. I know what my credit score is, it's in the high 500s, just because of student loans and higher credit limits at the moment, so I don't want to chance lowering my credit by applying for refinancing if I may not get it.

My bank doesn't do car stuff anymore. and I may consider the credit union thing at some point. The thing that's getting me is that I'm getting the complete opposite advice that i got in my last car thread. Everyone was saying "Buy used! Buy used!" and now I have a used car and everyone is saying i screwed. Oh well. Hindsight is 202/20 I guess.


So now that I have some of the answers, is anyone financed with any of the above mentioned companies? Capital One, Citi, Faragut or HSBC?

You should buy a used car, generally in the 2-4 year old range.

I have calculated your total financed price of about $17,500, and would guess this includes all the tax, le, and license stuff.

You haven't gotten screwed at all, if the car is in decent shape and you plan on keeping it for a while.

The number one thing about owning a car that the vast majority of the buying public doesn't know:

The largest cost of owning/operating a car is the REPLACEMENT cost. Not gas, not maintenance, not nuthin' else. Replacement.

Do the math:

You will have paid (roughly) $23,000 for this car when all is said and done.

If you decide to sell it in 6 years, then you have to pay another chunk of cash for THAT future car.

But, look at that $23,000 over the six years you will own it, assuming you sell it then, and the trade in value is minimal.

23/6= 3,900 per year in acquisition costs.

Gas, as outrageous as it is, still comes in behind this cost. 3900 divided by $4 per gallon, muliplied by assumed miliage rate of 30 miles per gallon is 29000 miles worth of gas. If you put less than 29k miles per year on your car, even with gas at four bucks a gallon, the replacement/acquisition costs of this car STILL are bigger than gas costs.

The real answer to reducing the costs of owning/operating a car, is simply to hold on to that car for longer, generally about 10 years.

After you get this sucker paid off, yes, it will be old, and require a good chunk of maintenance, but odds are the amounts sunk into repair will STILL be less than buying a new car.

New cars do make sense if you plan on holding on to them for a long time, say 10+ years. Used cars tend to be cheaper if your intended holding time is less.

[BacktoBasics]

Basically what I'm saying is don't shop your credit until you are 100% sure you found what you wanted. Most dealerships have multiple banks available to be competative. Furthermore you are way better off securing financing from your own bank...who is on your side of the battle or go open an account at a credit union. That way you only have one inquiry and you're building a good history with your own bank. I never and I mean never fill out an application at any dealership.

[BacktoBasics]

You should buy a used car, generally in the 2-4 year old range.

I have calculated your total financed price of about $17,500, and would guess this includes all the tax, le, and license stuff.

You haven't gotten screwed at all, if the car is in decent shape and you plan on keeping it for a while.

The number one thing about owning a car that the vast majority of the buying public doesn't know:

The largest cost of owning/operating a car is the REPLACEMENT cost. Not gas, not maintenance, not nuthin' else. Replacement.

Do the math:

You will have paid (roughly) $23,000 for this car when all is said and done.

If you decide to sell it in 6 years, then you have to pay another chunk of cash for THAT future car.

But, look at that $23,000 over the six years you will own it, assuming you sell it then, and the trade in value is minimal.

23/6= 3,900 per year in acquisition costs.

Gas, as outrageous as it is, still comes in behind this cost. 3900 divided by $4 per gallon, muliplied by assumed miliage rate of 30 miles per gallon is 29000 miles worth of gas. If you put less than 29k miles per year on your car, even with gas at four bucks a gallon, the replacement/acquisition costs of this car STILL are bigger than gas costs.

The real answer to reducing the costs of owning/operating a car, is simply to hold on to that car for longer, generally about 10 years.

After you get this sucker paid off, yes, it will be old, and require a good chunk of maintenance, but odds are the amounts sunk into repair will STILL be less than buying a new car.

New cars do make sense if you plan on holding on to them for a long time, say 10+ years. Used cars tend to be cheaper if your intended holding time is less.

Either you're in retail or are very close to someone who is. Good advice here.

[RandomGuy]

That is not entirely accurate, somewhat but not entirely. Although multiple pulls from one central agency typically can be consolidated. I can easily shotgun someones credit. Give me 3 days and I can lower your score by 30-40 points simply by shopping you from bank to bank. I can take you from earning 4.99 to just barely qualifying for 8.99 in 72 hours.

Its one of the oldest tricks in the book.

Get a customer that makes you the first stop and they aren't going to buy right then and there because they want to keep shopping. Simply tell them to go ahead and fill out the application to see what the rate will be. That way we can lock the rate in :winkwink: If a few weeks down the road they decide to come back the rate and deal is already in place...how wonderfully convienent. Then send their credit to every lender available and lower their score so the next few dealers are unable to secure as low a rate and they'll likely come back to you thinking you got them the better deal.

The rest of that post is spot on! Thanks for posting it.

oooh man, that is nasty. I am in the process of shopping for a new car, and will keep this in the back of my mind before giving my credit info to any dealer.

[RandomGuy]

[RandomGuy], Either you're in retail or are very close to someone who is. Good advice here.

I am an accountant who is shopping for his own car.

Thanks.

[BacktoBasics]

I am an accountant who is shopping for his own car.

Thanks.

Just hook up with your bank instead of a dealership for financing and you'll be fine.

Like you posted above 30% balance of available credit on your Credit Cards. You can really raise the out of your score and get a better rate if you pay your cards down and wait for the new balances to show up in your bureau...30 or so days. Then do your app at your bank once that happens. Unless you're already scoring over 680...most accountants have good scores because they manage their money well.

[Clandestino]

I love even more how the arrogant posters here, who know nothing, love to hand out bad advice on top of bad advice.

you don't know what my profession is subprime.

[RandomGuy]

Just hook up with your bank instead of a dealership for financing and you'll be fine.

Like you posted above 30% balance of available credit on your Credit Cards. You can really raise the out of your score and get a better rate if you pay your cards down and wait for the new balances to show up in your bureau...30 or so days. Then do your app at your bank once that happens. Unless you're already scoring over 680...most accountants have good scores because they manage their money well.

Unfortunately, I am just out of grad school with a good chunk of debt, and two small growing kids.

All things considered, I am ok, but definitely could be better. Give it another 5 years, and I should be fine. Now if I can just get our two old jalopy's to last that long...

Actually I just did a cost analysis of whether or not to replace my old, fully-paid-for car with a new one that makes better gas mileage.

Gas would have to go to about $8-10 gallon before it would make sense to get a newer car that had better gas mileage than the tank (crown vic) I am driving now.