Delaying purchase due to mortgage pre-approval

[investmentgamer]

I'm in the situation that my Model X order may end up being ready for delivery at around the same time as I'm buying my first home. My understanding is that any big purchase or new debt after mortgage pre-approval and before funding can be a disaster, so I may end up having to ask Tesla to delay the purchase and delivery. Has anyone had to do that and, if so, was Tesla accommodating?

Thanks.

 

[SabrToothSqrl]

I believe tesla will allow you to defer once. And you are correct, they will look at your debt to income monthly. Qualify for the mortgage first.

 

[CHG-ON]

You need to CLOSE the loan before you pick up the debt. All docs signed, notarized. Qualifying won't cut it. Banks recheck your credit on that day to see if you have done anything. I just refinanced and waited until the loan was funded just be safe. If you don't play it right, you could not only lose the loan and house, but be in for damages from the seller. You have to tread carefully on this, especially since the game has changed since the crash.

 

[SabrToothSqrl]

Correct, I should have said after you are moved in. Not just qualified. Even taking on debt a month later may be an issue for some.

 

[CmdrThor]

A lot more information is needed. Did you order a P90D? If not, you shouldn't worry at all, your Model X isn't coming any time soon. Can you defer? Yes, Tesla will be happy to delivery other Model Xs ahead of yours. There are rare instances where people have shown interest in a 85 kWh Model S which was going away where buyers were told you must order now or end up paying more for a 90 kWh, but I don't foresee that happening with Model X anytime soon.

I assume you've already confirmed your Model X order or you wouldn't be asking this question, so hopefully you've considered your DTI with both mortgage payments and Model X payments. If either would be a red flag with a lender you will be in trouble, but obviously you'd like to prioritize the place you live over the car you drive so like other posters suggested you should close your purchase of the home before your apply for financing on the Model X.

 

[MsElectric]

Also if you are financing the Model X, the mortgage will be a factor for that but definitely get your home mortgage together and wrap up the settlement before you do anything. If you are financing part or all of the Model X cost I would not even let the lender run a credit check on you before the mortgage is settled. You don't want the bank asking you based on a credit check if you are about to finance a major purchase and how that will affect your debt to income ratio.

As has been pointed by several others, the debt to income ratio is the key.

Congrats! It is quite an accomplishment to be in a position to buy your first house and a Model X at the same time!

 

[investmentgamer]

Thanks for all the replies. I already confirmed the order but it is only a 90D so I don't expect delivery until mid-year at the earliest and maybe more like September if the estimates are on Elon time. But mid-year may be about when I'd be closing the mortgage (I am only just starting to look for houses now). I'm not worried about my DTI being a real issue, just the risk of the mortgage lender freaking out. I may or may not even finance the Model X.

 

[tstafford]

You need to CLOSE the loan before you pick up the debt. All docs signed, notarized. Qualifying won't cut it. Banks recheck your credit on that day to see if you have done anything. I just refinanced and waited until the loan was funded just be safe. If you don't play it right, you could not only lose the loan and house, but be in for damages from the seller. You have to tread carefully on this, especially since the game has changed since the crash.

This. I went thru the exact same thing. I put the deposit down on my Tesla on the day I closed on my house to make sure there was no overlap (but that I was moving as fast as I could!!). Be careful. I know in my case, the wife would have REALLY hated the Tesla purchase if it messed up the house purchase.

 

[bonaire]

I'm in the situation that my Model X order may end up being ready for delivery at around the same time as I'm buying my first home. My understanding is that any big purchase or new debt after mortgage pre-approval and before funding can be a disaster, so I may end up having to ask Tesla to delay the purchase and delivery. Has anyone had to do that and, if so, was Tesla accommodating?

Thanks.

Buy your boss a weekly bottle of good scotch. Keep them happy. You need to make sure you job is secure to pay for all this.

 

[CmdrThor]

Thanks for all the replies. I already confirmed the order but it is only a 90D so I don't expect delivery until mid-year at the earliest and maybe more like September if the estimates are on Elon time. But mid-year may be about when I'd be closing the mortgage (I am only just starting to look for houses now). I'm not worried about my DTI being a real issue, just the risk of the mortgage lender freaking out. I may or may not even finance the Model X.

If you are in a position where you don't HAVE to finance Model X, then you are good to wait until a week or so before scheduled delivery to even worry about applying for financing if you decide to go that route. It would be more of a problem if you had to finance because you wouldn't want to wait so late before taking delivery.

 

[Cyclone]

You need to CLOSE the loan before you pick up the debt. All docs signed, notarized.

Just do this before taking out a loan/lease for your Tesla. Heck, even if you are paying for the Tesla in cash, I would wait until this just in case your lender uses "savings" as part of their calculation. I think for my last mortgage, they were looking at 6 month's worth of payments to be in savings (including retirement accounts though).

 

[Max*]

Buy your boss a weekly bottle of good scotch. Keep them happy. You need to make sure you job is secure to pay for all this.

What if your boss doesn't drink?

Just do this before taking out a loan/lease for your Tesla. Heck, even if you are paying for the Tesla in cash, I would wait until this just in case your lender uses "savings" as part of their calculation. I think for my last mortgage, they were looking at 6 month's worth of payments to be in savings (including retirement accounts though).

Is that a new requirement to buy a house?

When we've bought, I don't recall giving the lender access to my 401k/IRA accounts.

 

[Cyclone]

Is that a new requirement to buy a house?

When we've bought, I don't recall giving the lender access to my 401k/IRA accounts.

I don't know. My last mortgage was in 2011 and my lender wanted to see funds that would cover that. They accepted my IRA as documentation for it. It could have just been an underwriting requirement for that specific lender; they are a conservative lender since most of the loans are portfolio loans vs. sold on the secondary market.

 

[bonaire]

This thread reminds me of why I dislike the whole mortgage situation. I could have paid off my house over 5 years ago if I had taken out a 15 year mortgage when I bought it instead of 30-year which I've refinanced twice. Once to a new 30-year and again now to a 15-year. Paying down debt as fast as I can these last couple years. Can't wait to cancel a $21K credit card with Chase next month. Chase has my home loan too and I love sending in lots of excess principal. Hoping to get the 15-year done by 10 or sooner. And yesterday, I get a letter from Chase saying how good it would be to re-finance yet again. The last refi that I did (as an existing customer) took 3-months of back and forth for an "easy refinance".

 

[MsElectric]

This thread reminds me of why I dislike the whole mortgage situation. I could have paid off my house over 5 years ago if I had taken out a 15 year mortgage when I bought it instead of 30-year which I've refinanced twice. Once to a new 30-year and again now to a 15-year. Paying down debt as fast as I can these last couple years. Can't wait to cancel a $21K credit card with Chase next month. Chase has my home loan too and I love sending in lots of excess principal. Hoping to get the 15-year done by 10 or sooner. And yesterday, I get a letter from Chase saying how good it would be to re-finance yet again. The last refi that I did (as an existing customer) took 3-months of back and forth for an "easy refinance".

The 30 years mortgages are a huge scam the way the amortization schedule is structured. We got sucked into this mistake when we initially bought the house and thankfully we refinanced first to a 20 year mortgage and then to a 15 year mortgage. We still have about 10 years remaining. When you refinance you never want to "reset the clock" of your mortgage because that means you reset the amortization schedule.

You can shave off some of your mortgage just by paying the mortgage weekly or biweekly. Also sending in additional principal is always better, especially at the beginning of the mortgage. The biggest reason we've delayed purchasing a Tesla is our mortgage. We realized if we make an extra $40K principal payment each year, we'd actually have no mortgage in 5 years and then we could buy a brand new top of the line Model S every 2 years just by not having to pay a mortgage

Don't think I can last 5 years without buying a Model S but for the immediate future we want to pay down our mortgage as much as possible and only use excess savings towards a Tesla. As much as I'm obsessed with Tesla the mortgage comes first and hopefully we can finally figure out our Model S purchase at the end of this year or early next year.

 

[Max*]

As a side note, you can get a mortgage for pretty much any number you like. When I refinanced a while back, I had 22 years left on my mortgage, and wanted to keep the same timeframe. So I took a 22 year mortgage.

Sure I could've taken 20 years, but the APR was the same.

 

[tga]

You need to CLOSE the loan before you pick up the debt. All docs signed, notarized. Qualifying won't cut it. Banks recheck your credit on that day to see if you have done anything. I just refinanced and waited until the loan was funded just be safe. If you don't play it right, you could not only lose the loan and house, but be in for damages from the seller. You have to tread carefully on this, especially since the game has changed since the crash.

Back in 2005, I had a house sale almost fall through because the buyer (actually, my buyer's buyer - my buyer was selling their house in the morning, then buying mine that afternoon) ran up a bunch of credit card debt buying a washer/dryer set and other house stuff. The mortgage company ran their credit that morning and freaked.

Luckily they were able to find someone to give them money at the last minute. I didn't ask for the details.

 

[ahurst]

I'm in the situation that my Model X order may end up being ready for delivery at around the same time as I'm buying my first home. My understanding is that any big purchase or new debt after mortgage pre-approval and before funding can be a disaster, so I may end up having to ask Tesla to delay the purchase and delivery. Has anyone had to do that and, if so, was Tesla accommodating?

Thanks.

I am a mortgage professional. Your lender will "soft hit" your credit just prior to your closing date on your home purchase. If they find a new inquiry or new tradeline, you will have to explain what that is and attest that you have obtained no new credit.
If it's an inquiry, just say you were shopping mortgage rates.
Even if you bought a Tesla now, you would not have a new tradeline showing so soon on your credit report.

- - - Updated - - -

You need to CLOSE the loan before you pick up the debt. All docs signed, notarized. Qualifying won't cut it. Banks recheck your credit on that day to see if you have done anything. I just refinanced and waited until the loan was funded just be safe. If you don't play it right, you could not only lose the loan and house, but be in for damages from the seller. You have to tread carefully on this, especially since the game has changed since the crash.

This is somewhat accurate, but it's not that dire or scary. I would start the application for Tesla financing prior to your mortgage close date, and just delay signing the Tesla loan until after your home closing.

 

[neroden]

The 30 years mortgages are a huge scam the way the amortization schedule is structured.

HISTORY LESSON TIME!

Before the 1930s, there was basically no such thing as a 30-year mortgage. The standard was 15 or 20 years. During the 1920s, there were a lot of dangerous exotic products like "balloon mortgages". Folliwing the 1929 crash, huge numbers of people were losing their homes to foreclosure. The banks were unable to actually handle the house reposessions and were letting the houses rot and go vacant. (Sound familiar? It happened after the 2008 crash too.)

As one of the emergency measures to fight the Depression, FDR passed a law which replaced most of the 15-year or 20-year mortgages to 30-year mortgages. This allowed people to make lower payments and not lose their houses, while allowing banks to get an income stream rather than trying to handle all the house repossessions. This worked well as an emergency measure.

However, for some reason -- habit, popularity -- the 30-year mortgage persisted. It makes no economic sense for the most part; for it to make economic sense, you have to (a) plan to live in the house for more than 30 years, and (b) have a house of such high build quality that it will *last* more than 30 years with minimal maintenance, and neither is true in a typical house. Basically the 30-year-mortage market has been backstopped by federal government agencies for its entire existence, and would probably disappear if the goverment were not the primary mortgage financer, or if the government decided to stop extending what was actually a 70-year-old emergency measure.

If you're on a 30-year mortgage you're basically a renter. If you can afford a shorter mortgage and you plan to keep the house, you want a shorter mortgage.

 

[sarachambers81]

I'm so glad I found this thread. I kinda am in the same situation. Having a mortgage and a car loan is difficult, especially now with all the pandemic thing. You just can't be sure what's gonna happen tomorrow.