How can buying a car affect buying a house?

My wife and I are preparing to buy a house. One of our cars broke down. I want to buy a new one, but she's worried it might damage our chances of getting the house we want. How does buying a car affect buying a house?

Answer
Your wife is right—buying a car does have an effect on the house-buying process in two ways:
  • When you buy a car, that adds to your overall debt load. This makes you look like a riskier candidate for a loan, so mortgage lenders will be less likely to approve your application.
  • Taking on a car loan is expensive, and having a mortgage and a car loan might make your dream home a little less affordable.
However, if you budget well and are financially comfortable, you can absolutely have a car loan and a mortgage at the same time. You can even bundle your insurance for your new purchases to potentially save yourself some money.
Regardless of what you choose to do, though, you’ll need to shop for new insurance. The easiest way to do this is through the Jerry app! Jerry will collect insurance quotes for you so you can compare pricing and coverage for free,
Liz Jenson
Answered on Nov 15, 2021
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