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Buying a Car Before a Home? The Las Vegas Mortgage Mistake to Avoid

Written by Kimberly Smith - Your trusted Las Vegas Real Estate Queen



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Thinking of buying a car before a home in Las Vegas? Learn how a new car loan can reduce your mortgage approval and even cost you your dream house.

🚗 The Temptation: New Car Smell vs. New Keys

You’ve been pre-approved for a home in Las Vegas, and the idea of driving off in a brand-new car feels tempting. But financing a car before finalizing your home purchase is one of the most common—and costly—mistakes buyers make. That “affordable” car payment can reduce your mortgage approval by tens of thousands of dollars, delay your closing, or even kill the deal altogether.

💸 How a Car Loan Impacts Your Mortgage Approval

Mortgage lenders don’t just consider your income—they heavily weigh your debt-to-income ratio (DTI): the share of your monthly income that goes toward debt payments, including auto loans.

  • Most lenders want a DTI below 36%, though some loan programs allow higher DTIs up to 43–50% with strong compensating factors.

  • A new car payment immediately pushes that ratio higher, making you riskier to lenders.

Example:

  • A $550/month car payment can potentially reduce your buying power by $35,000–$50,000, depending on your income and lender’s limits.

  • A $400/month car payment can lower approval by around $25,000–$35,000.

👉 These figures are estimates—your exact numbers depend on your income, loan type, and lender guidelines.

📉 The Domino Effect of a Car Loan

It’s not just about the monthly math. A new car loan can ripple through your entire mortgage approval:

  1. Reduced Buying Power – Every dollar in car payment shrinks the loan amount a lender is willing to approve.

  2. Higher Mortgage Rate – A higher DTI can make you look riskier, sometimes pushing your rate higher.

  3. Loan Denial – If the added debt pushes your DTI above the maximum, your approval could vanish.

🏡 Timing Is Everything

Does this mean you can never buy a car if you want to buy a home? Of course not. It just means wait until after the keys are in your hand.

A car will always be there. The house you love? Maybe not.

Think of it this way:

  • Buy the car first → risk losing the house.

  • Buy the house first → enjoy parking that car in your own driveway.

⚠️ What If Your Car Breaks Down During Escrow?

Life happens. If your car fails during escrow:

  • Talk to your lender first before taking on new debt.

  • Ask if repair financing or leasing would affect your DTI.

  • Disclose everything to avoid closing delays.

Even good reasons for new debt can stop a loan. Transparency protects your closing date.

👑 Kimberly’s Real Estate Queen Tip

When you’re in the homebuying process, pause on big purchases. Cars, furniture, credit cards—they can all change your loan approval at the worst possible time.

Rule of Thumb: Until the keys are in your hand, don’t finance anything big.

📍 Why It Matters in Las Vegas

In the Las Vegas market, buyers often face multiple-offer situations. Sellers want to know you’re financially stable and fully approved. A new car loan can make your approval look shaky—and cost you the winning bid.

✅ Next Steps for Smart Buyers

  1. Hold off on financing a car until after closing.

  2. Ask your lender to run “what-if” scenarios if you’re considering new debt.

  3. Keep your credit and DTI stable until you’ve moved in.


👑 Kimberly Smith is a top Las Vegas Realtor known for her sharp market insight, strategic approach, and commitment to helping clients move smart—whether buying, selling, or just exploring what’s next. She’s not just a local expert—she’s The Real Estate Queen of Las Vegas.

📞 Connect with Kimberly:📍 Serving Greater Las Vegas | 🏡 Luxury + Residential

📲 702-706-5885

📱 Follow on Instagram: @realestatequeenoflasvegas


 
 
 

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