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Should you ever buy a new car?

You might lock yourself out of a mortgage
You might lock yourself out of a mortgage © Sakarin Sawasdinaka/Shutterstock.com

If you're planning to buy a new house or refinance the one you have, adding a car loan to your debt load could wreak havoc on your borrowing abilities.

"Jumping to get that tempting car loan could price you out of the house you want to buy or the interest rate you want to get on a refinance," Nicol says.

Interest rates on a mortgage or refinance are based not only on your credit score, but also on your debt obligations. Lenders these days also tend to be more conservative. So if you've just taken out a car loan, the bank might not be too keen on giving you an even bigger loan, that is, a mortgage.

With interest rates at historic lows, Nicol advises making the most of these rates with a house first and putting the car on hold. "Even if you don't get the awesome car deals that are out there, it's still a much smaller purchase than a house," she says.

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