From: alan 
Newsgroups: misc.consumers.house
Subject: Re: Taking out a car loan to reduce rates on a house?
Date: Mon, 14 Mar 2005 19:21:27 -0800

v wrote:
> On Sun, 13 Mar 2005 14:06:48 -0800, someone wrote:
> 
> 
>>he's already had a credit card (which he pays off the balance every 
>>month) and already has a car (he just wants a better one).  The purpose 
>>of the car loan is not that he doesn't have enough money 
>>...The purpose of the loan is to boost 
>>his credit rating (or whatever rating lenders use) for a future home 
>>purchase.
> 
> 
> What a crock of SHIT.  Is there something WRONG with his credit now?
> Why does it need to be boosted?  Yeah if someone never had any credit,
> they should go out and get some - but NOT by buying a new car!  What,
> did a car salesman tell him this?
> 
> Now, plenty of car loans have very very low rates so its not like he
> would be losing a "ton" in interest like people are saying (as long as
> he takes a short loan).  But does he plan on buying the house while
> the loan is outstanding?  

No.  He probably won't buy a house for at least a few years.  He can pay 
off the car loan in a few months.  This "other person" told him that it 
will help if he can "show that he can take out a loan and pay it off".


'Cuz (as others have mentioned) the monthly
> payment will HURT his ability to borrow as it counts against his
> capacity ability to make monthly payments.
> 
> The folks who chime in how stupid it is to buy a new car because it is
> a bad investment are bringing in an irrelevancy.  If he likes cars
> (like I do) and wants a new one, then its his money to spend.  

Yeah, he actually wants the car.  A pre-OBD2 M3, if I recall correctly.


He
> should buy theatre tickets, a trip to Jamaica, a boat, a diamond ring,
> what instead?  Its his money to spend.  Let's keep it to the Q.  He
> should not take out a car loan FOR THE PURPOSE OF getting a mortgage.
> He should take it to buy a car IF HE WANTS TO, knowing it has a
> negative effect on his ability to buy a house.
> 
> People who feel its smart of them to buy used cars should keep their
> mouths shut about it, because the more people who buy new cars, the
> better the used car supply.  If "everybody" took their advice, there
> wouldn't be used cars to buy!
> 
> Regards,
> 
> -v.
> 
> 
> Reply to NG only - this e.mail address goes to a kill file.