[matt_435xi]

I am in a bit of a quandary and this forum has been a wealth of information so I am hoping you can help resolve my current issue...

I am building a new home that is planned to complete May/June timeframe of this year. I have always been told near closing on a mortgage don't do anything drastic like - lease/buy a new car. And that is my issue.

My 2012 BMW 335i, which I love, lease is up in April - right before my home completes. My original plan was to buy the car out when my lease expired as I am way over on mileage and I am happy with the car. But I am afraid buying a $34k car, or leasing a brand new one, would raise red flags right before I close on my home.

So, my thinking is to head to my local bmw dealership and re-lease my car for an extra 6 months extending my expiration to October of this year. At that point I will decide if I want to buy it out or lease a new car. Thoughts?

[tboooe]

Do you think you are at risk of not qualifying for a mortgage? If your credit score is very good I wouldn't worry about it.

[zamboni]

Matt good moved on the extended lease and wait the LCI models and lease one.

[pkancel]

Just an FYI, unless you are increasing your car payment drastically, buying the car when the lease runs out wont hurt your home closing. They might make you write a letter explaining what you are doing but here is the bigger question. If you buy the car, will there be enough time, approx 30 days before you go in for the home closing. I ask because you need the time for the lease to be paid off and cleared from your credit. As your mortgage person what they think and they will help you. If you can extend your lease, maybe do 3 months vs 6.

[OC1]

Ask your loan agent.
If you qualified for a mortgage with your current BMW lease payment then as long as the car monthly loan payment if you decide to purchase is not higher than your current lease payment it should be ok

[Blubaron79]

Being in the housing business: Talk to your loan officer.

[Professor///M]

Originally Posted by matt_335Ci

I am in a bit of a quandary and this forum has been a wealth of information so I am hoping you can help resolve my current issue...

I am building a new home that is planned to complete May/June timeframe of this year. I have always been told near closing on a mortgage don't do anything drastic like - lease/buy a new car. And that is my issue.

My 2012 BMW 335i, which I love, lease is up in April - right before my home completes. My original plan was to buy the car out when my lease expired as I am way over on mileage and I am happy with the car. But I am afraid buying a $34k car, or leasing a brand new one, would raise red flags right before I close on my home.

So, my thinking is to head to my local bmw dealership and re-lease my car for an extra 6 months extending my expiration to October of this year. At that point I will decide if I want to buy it out or lease a new car. Thoughts?

This is not a question for the self proclaimed "experts" on this forum. What you need to do is pick up the phone and call your mortgage broker and explain the situation. He or she will explain exactly what funds to use, and what not to use.


The reality is that many of these companies, even the big ones, leave underwriting until the week of the mortgage, although they have nearly a month before to complete it. So what happens is your file is pulled at the last minute, and then they have a ton of questions, and last minute explanations. Then they decide to go away on a 3 day vacation, which will ultimately delay your closing date.


Realistically this is a discussion for you and your mortgage broker. A re-lease of your current vehicle should not affect anything. Lease of a new vehicle should not affect anything (since you are showing it as recurring debt/payment right now, so as long as the payment isn't drastically worse). Removing liquid assets to purchase your vehicle will affect your ability to have a home loan.

[Buckeyes]

Why not just extend your current lease for a few months. I did it with my Infiniti. Extended it for 6 months and can turn it in anytime during the 6 months so it's basically month to month. Infiniti allows you to do that twice for a total of 12 months. It worked out great and gave me time to find my 335i m sport

[Damon44]

Originally Posted by JSTDR1V

This is not a question for the self proclaimed "experts" on this forum. What you need to do is pick up the phone and call your mortgage broker and explain the situation. He or she will explain exactly what funds to use, and what not to use.


The reality is that many of these companies, even the big ones, leave underwriting until the week of the mortgage, although they have nearly a month before to complete it. So what happens is your file is pulled at the last minute, and then they have a ton of questions, and last minute explanations. Then they decide to go away on a 3 day vacation, which will ultimately delay your closing date.


Realistically this is a discussion for you and your mortgage broker. A re-lease of your current vehicle should not affect anything. Lease of a new vehicle should not affect anything (since you are showing it as recurring debt/payment right now, so as long as the payment isn't drastically worse). Removing liquid assets to purchase your vehicle will affect your ability to have a home loan.

Well spoken. Leave liquid assets alone. Do not incur significant new debt if your credit score and financials are close.
It won't clear with the bank or state for a month ...that is correct.
Three months is more than enough time. I hate giving leasing company more than they deserve.
If credit is close pay off all gasoline and dept store cards to zero.
Take all visa , MasterCard etc to zero as well before underwriting if you think you are close.
Good luck.

[nicknaz]

Good advice here. If you move cash to buy a car, that will raise flags in the review process; definitely talk to your loan officer first

Also, as an FYI I am not sure you will be able to extend the lease on your car unless you order another BMW. You need a production number when you call BMW FS and they will extend your lease as long as needed for your new car to arrive

[pcbrew]

Originally Posted by nicknaz

Also, as an FYI I am not sure you will be able to extend the lease on your car unless you order another BMW. You need a production number when you call BMW FS and they will extend your lease as long as needed for your new car to arrive

I have heard you can extend your lease for up to 6 months if you order another BMW - same monthly charge and mileage allocation per month. But, can you get a production number for 2016 in April/May?

I am actually in the same situation - lease ends in May and I would like to extend to get an LCI model. Although I may have to do something more drastic to get next gen engine 330i/340i. From what I hear these are only coming in 2017.

[matt_435xi]

thanks everyone for your feedback, I talked to my mortgage agent and she said I can do whatever I want as long as I keep my car payment close to my current monthly payment. it will not effect my closing as my debt/income ratio and credit score are in a good position.

[zinner]

sounds reasonable. thanx for following up with your findings.

[F32Fleet]

Q: Do you have a construction loan which will roll permanent or is this a deal in say a development where you've just put a contract down on a lot and some deposits for upgrades and such?

When qualifying for a mortgage the bank will include the monthly lease payment in your debt ratio calculations regardless of the number of payments remaining. The premise is that you'll have to lease again once your current one is up. Auto loan payments conversely can be excluded when you have 10 or less remaining.


Assets for closing. Depending on the characteristics of your loan, you may/may not need reserves after closing. Reserves are the assets remaining after closing. Reserves are expressed as the # of months in your new monthly house payment. Reserves don't have to be cash only. Equities, retirement accounts are also considered but at a discount of approximately ~40% (keeping it simple).

Just ask your loan officer if you need reserves and make your decision.

[matt_435xi]

My loan officer said with my credit score and my debt/income ratio I am ok to buy/lease a new car as long as my payment isn't dramatically different. I have chosen to extend my lease 6 months so I can place an order this summer for the 340xi.

Thank you all for your great feedback!

[matt_435xi]

Originally Posted by pcbrew

I have heard you can extend your lease for up to 6 months if you order another BMW - same monthly charge and mileage allocation per month. But, can you get a production number for 2016 in April/May?

I am actually in the same situation - lease ends in May and I would like to extend to get an LCI model. Although I may have to do something more drastic to get next gen engine 330i/340i. From what I hear these are only coming in 2017.

you can get an LCI, talk to your dealership. you can put a deposit down to reserve a production number once they become available this summer. the 2016 LCI 340i/330i go into production July 2015. I was able to do this already to extend my lease 6 months, BMW will approve without a production number as long as you give the dealership a deposit with the intent of ordering as soon as avail.