Need a new car... How long should I wait?

[JeimyGirl]

Hello! I was hoping to get some advice. I was just involved in a bad car accident, and my car was totaled. The insurance company has agreed to pay off my car, and have sent the check to the loan company yesterday for a payoff. I also just purchased my first home in July of this year. So my question is, how long should I wait to get my new loan?

I ask this because I am only 23 yrs old, so I don't have the best of credit. Nothing bad is on it now (a few late credit card payments in 2006). I haven't even made my first mortgage payment yet. I want to get the best interest that i could possibly get.

I want my credit to reflect that I have paid off my car loan (I never made a late payment, so I have 3 yrs of history on my car loan) and that I have a mortgage with some history. I was going to wait until mid next year to get anew vehicle so my mortgage had at least 6 months of payments, but that plan isn't going to work now that I have no car.

My boyfriend lives in my home, and we work the same schedule, and he drives by my work everyday to/from his so I am going to carpool. I don't want to do this for too long because I have 2 kids, under 3 yrs old, and he only has a Civic, 2 door. It will wear my patience down to bare minimum after a while.

How long do you think I should wait? Is November too soon? January 2011? Any advice is welcomed :-)

[chane]

It depends just how bad your credit is and whether or not you can afford the payments. If you can afford the payments, I would get it soon. If you can't, I would save up. It's always best to have a down payment anyway.

Have you pulled your credit reports yet? Do you know your credit scores? Getting approved at a shitty rate or not getting approved at all is not good. You want to make sure you have good credit before you get any type of loan.

[JeimyGirl]

Thank you for your reply. My score when i got my mortgage a month ago was 650. i was making payments on my car up until it tot totaled Friday. I'm getting a check for the extra money left after my loan pay off and half of my original down payment for making my payments on time per an agreement. I was told that once you get a mortgage it boosts your credit score by a lot but i wasn't sure if it was instant or over time. Either way I'm going to wait until my credit reflects that my car loan is paid off at least.

[chane]

Yea, making payments on your mortgage on time will definitely raise your credit scores. The longer, the better. The scores may have taken a little hit because of the credit inquiries, but they should recover quickly.

I don't know. It's really up to you. You can probably get the loan right now, but if you can wait, you should. I know personally, I can't live without a car, so I would do it asap.

[Alfie]

i am not sure chane but would the fact the car is paid off help as its like a new loan than another loan?

[chane]

Yea, I think it would. I mean, it shows the lenders that you don't currently have an active loan, but they mostly go by scores and it sounds like your scores are good too...so theoretically, you should be ok to apply now.