Loans By Kathy: August 2011

What to do with a car that won't run?

What to do with a car that won't run or that you can not afford?  If you find yourself asking this question, you really need to stop and think about the consequences of the decision you make.

Image Ref: 21-20-62 - Rust covered car, Viewed 3981 times


Image Ref: 21-20-59 - Scrap car hanging by a wire, Viewed 5441 times

"Okay Kathy, so what are you talking about?" 


Recently I have talked with several would be first time home buyers that are being put out of the housing market because they have an auto repossession as a collection account on their credit report.  In most cases, if the balance owed is more than $5000, that collection will have to be paid off in order to obtain mortgage approval.  

Now, no one wants to pay for a car that they no longer own.


So if you find your car payments are more than you can afford you can try to refinance into a lower interest rate or extend the length of the car note to reduce the payments.  If that is not an option, it is time to sell the car and buy something less expensive.  In either case, communicate with your lender.  They may be willing to offer a solution.


Any car is going to need repairs at some time.  It is a piece of machinery with many moving parts, and none of them will last forever.  Make sure you know what to expect in potential repair costs before you buy that "dream car".  As an auto owner, it is your responsibility to maintain and repair the vehicle.  

For more information about how repossessions will affect your ability to buy a home, please give me a call.


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Kathy Sheehan Senior Loan Officer






Bay Equity LLC

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11475 Great Oaks Way, Suite 350, Alpharetta, GA 30002

800.BAY.3703 Bay Equity LLC NMLS ID#76988



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The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.


Comment balloon 3 commentsKathy Sheehan • August 30 2011 04:34PM
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