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Does a car lease VS loan affect your credit score the same way? I want to get a new vehicle but am saving for a home as well.

by lindsey992 from Lynwood, California. Nov 21st 2016 Reply

Larry Gray (lgray_312_247)
#594 ranked lender in California - 1,139 contributions

The only time a car lease will not affect the "DTI" or debt to income ratio in qualifying for a home loan purchase is if you can prove it is paid by a business you own, or by your work directly or thru reimbursement. You will want to see ifthe new monthly lease payment does not interfere with the amount you need to borrow for a home purchase. You likely would not be comfortable with a monthly housing payment (principal, interest, taxes, insurance) that you could not qualify for while covering a car lease as well. When a lease expires you would be charged the monthly payment to your DTI nonetheless, as the bank knows you likely will acquire a new lease. If you need more borrowing power buy a car for cash.

Nov 21st 2016
William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

It will be pretty much the same impact on your credit scores, but it can affect your debt to income ratios.. (DTI). Lenders look at your monthly income and then compare it to your monthly minimum payments associated with "Debt".. so car loans (Lease or purchase), student loans, minimum payments on credit cards, etc.. these are all payments associated with "Debt".. we do not look at your monthly bills... cell phone, utility payments, insurance payments, etc.. those are all ignored.. .. I'm the preferred Broker here in Scottsdale AZ and Arizona and California is my primary market. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Nov 22nd 2016
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