Hi Mabs
I heard a discussion on the radio that when you have financed a vehicle and are looking to take a home loan, banks decline your application. They said you have a greater chance of succeeding in both when you start with a home loan. Here’s my situation. My credit score is great and I’m looking for a new car and later in the year, I want to buy a home.
This got me concerned because I have been careful with my finances and don’t want my plans to be delayed.
Mabs answers:
I am not familiar with this situation so I reached out to my friends in financial services. This is how they broke it down. When you apply for vehicle finance or a home loan or any type of loan, you are granted based on affordability. So in cases where your car repayments take a large portion of your income, your chances of getting a home loan are slim. Even when you already have a home and your bond repayments indicate that you cannot afford to take on more debt, you will not get finance based on that.
Based on the explanation above, my friends dispute what you heard on the radio. Times are tough and financial institutions are also bound by rules to finance individuals that have the means to service their debts. It is prudent to carefully monitor your finances and also ensure that you don’t take on more debt than you can service. All the very best with your shopping.
