I recently lost my job and with the price of gas my husband I and I can longer afford our SUV payment, gas, & insurance. We were thinking of handing it back over to the bank to just be done with the whole thing. We want to buy a home in a few years. How will this affect us?
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it will look almost as bad as bankruptcy on your credit. you are better off trying to sell the vehicle (like in your yard, not to a dealer) and getting what you can, paying what you get then payin off any difference you owe on the loan. if you take it back to the bank, they will auction it off for MUCH less than you could get for it by selling it yourself and you will still be on the hook for the difference & have the repo on your credit. if you can sell it to an individual and give them a bill of sale–that’s all they need to register the car & acts as ownership proof until you can provide them with the clean title
massively - give giving up the car wont do anything - they will sell it at auction and whatever the loan balance minus what they get at auction (which may be a lot less than you think it’s worth), they will add on a few 1000 for repo fees and then start coming after you for the balance - if the loan balance is 15000, you could actually wind up still owing 10k or more and no longer having the vehicle - it happened to me years ago and forced me into bankruptcy
Depends on how you handle it…
If the car gets repossessed, then it will definitely have a negative impact on your credit and may hinder your ability to get a home loan, though it will probably only mean you qualify for less of a mortgage with a higher interest rate.
That said, depending on how things are looking with the car loan, you may be able to get out of this with your credit intact. If you can sell the car for more than you currently owe, DO IT! Repay the bank(assuming there isn’t some huge balloon payment penalty) and voila, your car nightmare is gone and your credit still shines.
If you’re currently 90 days past due and they’re starting repo procedures against you, your credit is already tarnished somewhat but can be salvaged if you can get out of the loan without them repo-ing you. TALK to your creditor and explain the situation and see what they can do. It’s in their best interest to help you repay this loan, and if you’re up front, they’re more likely to work with you.
Again, best-case scenario is to try and sell the SUV for enough to repay the loan. If you can’t get that much for it, consider adding your own savings to the mix and settle up with the bank. What you’ll save in car payments and gas and insurance will be enough to replenish your savings quickly, not to mention what you’ll save on your future mortgage payment for having better credit.
Handing over to the bank may be easier, but not the way to go. Sell it yourself and settle up with the bank and your credit will be fine. Good luck!
It will look bad on your credit for sometime. But it doesn’t look as bad as them coming to get it from you after you fall behind. Go talk to the bank sometimes they will work with people to make smaller payments.
A home loan, or mortgage, is most simply described as a loan taken out so that you can purchase a home. Here we’ll explain the very basics of home loans so that you can at least have a basic knowledge of mortgages and how they work.To obtain a home loan you willpayment will be based on the principal and interest rate. You may also find that some lenders require that your mortgage payment also include property taxes, insurance, etc. The interest rate for fixed rate mortgage loans tends to be higher than that of variable rate mortgage loans.