First Time Buyer
What makes you a "First Time Buyer?":
This term refers to the fact that you have never financed a vehicle or that you haven't financed a vehicle in a long time and that is no longer showing on your credit report. This designation is created by the lack of activity on you credit bureau and is indicated by a zero credit score, or lack of activity in paying credit positively. This designation will unfortunately place you in the 'highest bracket of default', meaning the finance companies view your loan as VERY risky. You may think that this designation would be reserved for bad credit borrowers, but first time buyers are in fact, the highest bracket of default.
First time buyer programs are in decline:
Due to poor portfolio performance for finance companies, most lending institutions have dialed back, made more stringent, or have completely removed their first time buyer finance programs. There are ways to get around this and our trusted advisers in the finance department are highly trained at tailoring your car buying process to a fantastic first time buyers program. We can get you into a vehicle, you can bank on that! You may be wondering, 'Would a cosigner help me get a better rate?' - and the answer is, it's possible that a cosigner could improve your rate. This has a lot to do with just how good their credit "worthiness" ranks with a particular auto finance company. If their credit score is really fantastic, it may dramatically improve the terms of the loan as it reduces the risk of default. If the cosigner's credit is average or poor it may help get an approval but not substantially, if at all, improve the rate. It's always best to try to establish yourself in a first time buyer program on your own but if you can have some backup options with a trusted cosigner - that can't hurt.
Do I qualify:
Qualification varies as do all loans that are based on credit, and the best way to find out if you qualify is to call: 855-971-6146 and ask to speak with a trusted adviser on our finance team. They are there to point you in the right direction and walk you through the process to make it a great buying experience for you. You will feel comfortable speaking with them about the first time buyer programs and it is likely that you will learn from them and feel more confident about your situation after sharing a brief conversation.
Some documents you may need for this process to get started:
- Proof of Residence - This is usually a utility bill that you have received in the last 30 days(phone bill, electric, water, heat, and sometimes a bank statement is acceptable). These are known to the finance institutions as P.O.R and need to have no past due balance showing. This documentation is to show the finance institution that you do likely live and operate your life from your residence that you will be listing on your credit application. This helps the banks and credit unions begin to establish a profile of you as a person and helps them to become comfortable with the idea of loaning you money for a vehicle.
- Proof of Income - This is an important metric for the bank, as they will use this to establish how much of monthly payment they will approve. It is not unlikely for this measurement to also have an affect on the rate in some applications for auto loans. Finances institutions will look at a high monthly payment in relation to your level of income and say that represents more risk. If there is more risk for them, it is likely they will reflect that risk by raising your rate to cover their risk. There are a few different ways you can prove income; including pay stubs, (if you are a W2 employee you can use bank statements - usually the last 3 months if you are self-employed), last 2 years tax returns, a combination of the both, and in rare occasions you can provide a letter of employment if you have just started working. Ultimately you will want to sit down with one of our sales advisers and have them educate you on the process of buying a car in this unique situation and make sure you align your goals with a reasonable expectation of what you can do. This will make you happier at the end of the day and leave you in a position to grow a strong credit score quickly and perhaps trade up into a better car for similar payments in short time.
- References - Have readily available a list of a couple people, who don't live with you and who don't mind being your reference (Usually a full name, address and phone # are required). These can be your best friends, a landlord you have a good relationship with, a former boss or coworker, or any individual who may know you. We don't often see finance institutions calling these people to check on your character or likely hood of paying them back, but it would be wise to include people who have nice things to say about you if they were to receive a call.
First time buyer programs in NH are difficult to navigate but we work directly with all of the programs and their finance institutions. Some of these finance institutions that we are honored to be doing business with include the following;
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