Naive idiot that I am, I thought that getting a car loan would be no big deal. After all, they give car loans to people with terrible credit all the time. My credit is excellent, and I have a large down payment, so I shouldn't have any trouble at all. Right? Ha, ha, little did I know.
We sat down with the loan officer; put all the pertinent numbers into her computer --- and --- red box. What's red box? That's when there's a problem. It seems that while I have excellent credit (fantastic credit even if I do say so myself) I have an unacceptable debt to earnings ratio. This means that, in their opinion, most of my paycheck goes to servicing debts. I was more than a little shocked at this because it is patently false. However, she soon explained that the entire house mortgage was being "held against me" as my personal debt. That, in combination to my student loan, is enough to put me in the red category. I argued that since M was equally on the mortgage maybe they should only assign 50% of the value to me. They countered that if something "happened" to him I would be responsible for the whole thing. I admitted that was true, but mentioned that we have mortgage insurance, so that is not a concern. They basically said that they don't care. They suggested I get a co-signer. Through extreme effort I remained civil.
I will NOT be getting a co-signer. I find that idea so offensive not because I don't trust M*, but because I can't stand the idea that I can't do this on my own. The purpose of a co-signer is to secure a loan for a person who, for whatever reason, can't be trusted to pay back the loan. I have the money for a large down, I have the good credit (I even qualified for the lowest interest rate), and I have a stable paycheck, but that isn't good enough. This seems (to me at least) to be proof once again that unmarried couples are discriminated against on a regular basis.
The end result of all of this, besides my impotent rage of course, is that I will not be getting a car loan. I've never liked paying interest anyway, so I just decided to use what I have and get a slightly less glamorous car. It may mean an older model or a few more miles on the clock, but at least I won't have a monthly car payment. It also means that I get the satisfaction of knowing that I am standing on my own two feet (if you know what I mean), and that I didn't need my daddy or my brother or my boyfriend to help me do it**.
Notes:
* I trust M implicitly or I wouldn't have bought a house with him. He has been nothing but kind and helpful in all of this, and he spoils me and looks after me all the time. However, a girl has to make some attempt to look after herself!
** All four of those men are dear, sweet people. I know they would cheerfully dig me out of any tough situation, and I am very lucky for that. Nevertheless, I try to slay my own dragons whenever possible.
4 comments:
It is OUTRAGEOUS that they will not incluse your Mortgage gaurrantee insurance in their estimation of your ability to pay.
Do all car-loan companies use the same assessment technique? I know they vary in Britain so you can shop around and get a deal that suits you.
I assume you're writing about your bank? Ask how much you are pre-qualified for. Credit unions are excellent as well. 4.1% on my current car. Only costs you $5 to join. There's also a loan through the dealer - it is a lot easier for the dealer to assume the risk, because they know they'll make a killing on selling any reposessed cars (not implying that you would default on your loan).
Each lender is willing to accept a certain amount of risk. So if your debt ratio is too high for them, they won't lend at the lower rates (it's nothing personal - it's actually a horribly unethical tactic creditors are using to fatten their wallets: ie, you are too much of a risk - and yes, I also decide how much of a risk you are - so pay me more money). Anyways, you should still be able to find a loan, but be prepared to pay higher rates.
Please don't shoot the messenger...
This was the credit union I was dealing with. Unfortunately most places appear to use the same formula for determining fitness. I could probably get a loan from a dealer, but they START at 9%. I haven't really wanted to try any other places because applying for credit hurts your credit score, and being rejected for credit lowers your credit score.
Car Photography is off the hook at this site.
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