If debating about whether to purchase a home or car first, you may want to do a little research first before making a decision. It is generally easier to get a car loan after you have purchased a home, than the other way around. Mortgage lenders have debt-to-income ratios that they follow, to determine how much of a loan you’d qualify to receive. If your income is high and your debts are low, then purchasing a car may not negatively impact your qualifying amount. If your income is average and the car you’d like to buy is a bit costly or will create a sizable debt, you may not qualify for as much as you’d like.
To help ensure you are able to purchase a home in your ideal price range, consult with one or two loan officers, give them an accurate account of your gross monthly income and debts, and they should be able to tell you the loan amount you’d qualify for, provided your credit report meets their minimum guidelines. The loan officer should work up this information for you with and without your new proposed car payment, to help you discern the order in which to make your purchase. Whether you elect to purchase your car first or last, make sure you take your estimated car payment into consideration when calculating your preferred monthly mortgage payment. Please remember that what your lender says you qualify for and what you feel comfortable paying may be two different figures. If you qualify for more home, than you feel comfortable paying, trust and stick with your target number.