That’s not really true. Usually anything over 50k will be secured by real estate with available equity, require better than 40% Debt/Income ratio, 700+ credit score, and a credit history of 5 years or so. If someone only has a credit card or an expensive car loan than just won't be enough in most cases. In fact most underwriters will wonder why someone is paying a high car payment and does not own any real estate.

 

I agree that it may not be enough to get a huge loan, just having a credit card and car payment, but the car payment gets you a heck of a lot closer to being approved than if you just had a credit card. I dont buy into underwriters questioning why a person has a car payment instead of real estate. At 22, there is no need for me to purchase a house for myself. Ill agree with a 30yr old not having a house, but having a decent sized car payment as a red flag though.

 

"dont buy into underwriters questioning why a person has a car payment instead of real estate"

Ofcourse you don't buy into it...it doesn't help your argument, so why would you?

I think it's funny to see these kids try to justify having an expensive luxury sports coupe while living with their parents who pay everything else (probably insurance too).

Look, if your parents are letting you leech off of them so you could afford a nice car, good for you, enjoy it while it lasts, and hopefully in the future you can break away from that dependability on someone else. But don't go around justifying this car by saying it's somehow good for your future...that's just plain BS. You know what would be good for your future of buying that 300k home? Putting the $400-$500/month you're paying for the car into a high yield savings account.

 

Well first off, if you read my entire post, you will notice that I dont buy into underwriters caring about a 22 yr old, but I agree with it for someone 30yrs or older. Second, you are ignorant for assuming that my parents pay for everything else (insurance too). I have paid for everything that I have ever bought. I pay for my car, insurance, college, etc... The reason I can afford a nice car is not because I leech, it is due to working my a$$ off. I work 50 hours a week, while still going to night school. I am able to pay for my car and save a couple thousand a month, which goes directly into my citi savings account. So you are the one that needs to justify why you have an expensive car.

 

Niro- Your right on.

I guess the prestige associated with this car (if any) is that you can afford to drive something you enjoy. Instead of driving something you can afford that you don't enjoy. If your in your early 20's and still living at home you really can't afford to live on your own and the car. In this case most people look at you and think your just bad with money.
Bottom line is that cars are a bad investment, and anything above the bare minimum needed to get you back and forth is a luxury.

 

I agree that cars are the biggest waste of money, but if I work hard, why not reward myself. Being older and driving a luxury car falls into the same bad investment category that the younger people are being put into. There is no need for a nice car, its just overkill. If they already own a house, why not invest in other property, or the stock market? My theory is, if I didn't have a car payment, I would spend that money on booze and gambling haha, so atleast I have something to show for it.

 

I'm not looking for an argument, but I thought you said you worked part time?

 

Yeah I did say that I worked part time, by that I meant I go to school, while still working. I have a start-up excavating company that I am working at 7 days a week, but I am going to Drexel to get my civil engineering degree, in order to better my company.

 

woo sounds cool. Any interesting stories/pics to share?
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By your description, I would fit under that category. I'm in my early-mid 20's and moved back home after college. My work is 15 minutes away though, which made it a wise decision NOT to get my own place...unless you can prove otherwise. At my current savings rate, I could still move out and make my car payments, but I don't see any good reason why I should burden myself like that. After all, rent is 0% ROI...