FHA loan requirements/does spouse have to be on loan? (premium, credit score)

[Daddys///M3]

Originally Posted by Briolat21

Um - unless its a state law issue (differences from state to state) you do not HAVE to be on the loan as long as your husband's income is sufficient for the amount you want to mortgage.

So, if he makes $50K by himself, and has no debts - using the old rule of 2.8x income, he could probably qualify for just under $150K by himself.

If you make $50K as well, and have no debts, the two of you together could possibly qualify for almost $300K.

Again, these are HUGE simplicities.


Also - if you will not be using your income to pay for the house, they will not pull your credit.

When first looking at houses I sat down with a broker to be prequalified - I gave them mine and my husband's info. After looking at both of them, he said "DO NOT PUT YOUR HUSBAND ON THE LOAN". My husband has many blights against him, and the amount of his income (low) vs the damage of his credit score compared to mine - it was not worth it.

So, 3 months later when I decided to pursue a loan, I talked to other mortgage brokers at other banks - and when asked would tell them flat out - this loan will be based on MY income, and MY credit. I was never asked for his social security number, his credit was not pulled again.

Will we count on his income?? Yes, of course - he will pay for food and utilities and savings and all those good things that make living possible. But my income is enough to sastisfy my debts (2 car payments, the mortgage, insurance, taxes, student loans) -- so there was no reason for them to look at his.

The mortage companies don't care about food/utilities. They care about you satisfying the debts that are in the name of the person looking for the loan. If your husband can sastify those alone and still be approved for a reasonable mortgage amount - there is no need for you to be on the Loan.

This is just not true. It is a FHA guideline, not a state law or anything else, that an FHA loan must include the debt obligations of the spouse if the spouse is not going to be on the loan. They do not have to use her score or income, but they have to pull her credit and include her debt obligation. I don't know how you got around it, maybe your loan was not a FHA loan.

[Daddys///M3]

Originally Posted by vday2004

Thanks for the info..my score according to equifax is 575...the reason being is my ex-husband abandoned me & our four kids and I had to live off minimal income, basically start over and try to support them. For the first 2 yrs of divorce, I didn't get child support(he flaked). For the past 4 years I've managed to get a good job(same comapny for 3 1/2 yrs), pay rent on the same place for 4yrs and am in school. I will graduate next year with a degree and my income will double. But in the meantime I've tried getting by and raising the kids..it's just taken me awhile and finally things are turning, but the past still haunts me with the debt. If i get the debt paid off(its about 2100)would that look favorably to lenders or is it more that it took me awhile to do it??

As I said via DM, I don't see any reason why you couldn't qualify for an FHA loan. The only thing is that they will stick to that 43% debt to income ratio pretty close because of the lower FICO, as opposed to giving you some leeway via a higher debt to income ratio. I wouldn't touch the credit report and I would just move forward on the purchase. The immediate effect of trying to clear that up will be a lower FICO, as all the negative credit will be bumped to the top. If you can't qualify for the home, then consider working on that report.

[vday2004]

I think I will wait because I don't want my score to drop anymore..my debt is low. I'm not sure how to calculate it into my income, but I guess it would be included in both our incomes??

Originally Posted by TwiloMike

You can wait to clean up your credit but if you go for an FHA loan you really don't even have to. It's up to you. It sounds like the issues with your report can be easily explained and an FHA underwriter won't hold them against you.

[TwiloMike]

Originally Posted by vday2004

I think I will wait because I don't want my score to drop anymore..my debt is low. I'm not sure how to calculate it into my income, but I guess it would be included in both our incomes??

The way debt to income is calculated is the sum of all minimum payments on all monthly debt obligations from all borrowers is considered versus total gross monthly income from all borrowers. For some FHA programs there are "carved in stone" limits on debt to income ratios, for other programs there is quite a bit of leeway. FHA overall leaves a lot to underwriter discretion, which is why if you're applying for an FHA loan make sure that the lender has FHA underwriters on staff and won't just pass your file through an automated underwriting system.

[praisethelord]

Originally Posted by TwiloMike

If your income has to be included in the calculations then you have to be a co-borrower. A score of less than 600 is not a horrible thing: as far as FHA is concerned it matters more why your score is so low, not the actual number. Where in the 500s is your score? My bank goes well below 580 when it comes to FHA- we employ a team of FHA certified underwriters because most FHA cases need manual underwriting.

How much below 580 will you go to help someone in need of an fha loan? My last scores were 561, 532, 516.

[renriq02]

FHA has no score requirement which means you can have a 350 and get an FHA Loan.

Most FHA lenders are requiring 580, but there are a few that go down to 400-500.

FHA requires no BK 13 in the last 12months, no BK 7 in 24months, and no foreclosure in 36months. Also, no credit lates in the last 12months is a must with most lenders.
FHA doesnt require reserves...but may compensate if you have a low score or high debt-to-income ratio.

Originally Posted by praisethelord

How much below 580 will you go to help someone in need of an fha loan? My last scores were 561, 532, 516.

[TimtheGuy]

Originally Posted by vday2004

thanks for the info. Our plan was to include my income so we could have more to buy a house. With the housing prices sky high, there's little out there, unless of course we want a 1 bedroom 400sq ft fixer upper. With 3 kids, it wouldn't work. I guess I need to work on cleaning up my debt...problem is there are things I didn't know about on my report(I just pulled it yesterday). My dear EX husband passed off some of his debt to me and it shows up on my report. One of the items was a $200 something bill from a long distance phone company from 2 years ago. We've been divorced for 4, and I havent had long distance service since before we were divorced. Any idea on how long it takes to clean things up??Other than that, I have good rental history and timely payments on other things. My score was 580, so I'm really not feeling too good at being able to be included on a loan.

It is pretty simple...if you want/need to count your income they the lender needs to use your credit. If you don't to use your income for qualifying then you don't need to use your credit or your debts.

[TimtheGuy]

Originally Posted by renriq02

FHA has no score requirement which means you can have a 350 and get an FHA Loan.

Most FHA lenders are requiring 580, but there are a few that go down to 400-500.

FHA requires no BK 13 in the last 12months, no BK 7 in 24months, and no foreclosure in 36months. Also, no credit lates in the last 12months is a must with most lenders.
FHA doesnt require reserves...but may compensate if you have a low score or high debt-to-income ratio.

Do you guys think it sends a bad message when you always talk about "you could be a 500" and get a FHA loan. Technically that is true, BUT how many people are you actually getting qualified who have <580?? 5%??

[windtimber]

Originally Posted by Briolat21

Um - unless its a state law issue (differences from state to state) you do not HAVE to be on the loan as long as your husband's income is sufficient for the amount you want to mortgage.

Despite what some other posters have said, it can be a state law issue - and not state mortgage law. You have to remember the effect of homestead laws. In some states a spouse can not encumber the homestead unless the other spouse joins in. In most states a married person can not pass title to the homestead unless his or her spouse joins in the conveyance or otherwise releases homestead rights. Consequently, based on appropriate state homestead laws, mortgage companies will not finance a homestead unless both spouses join in the transaction.

[renriq02]

i had a lady that had a 400 get approved.

Probably 1 in a million but I'm not going to start redlining everyone who tells me they have a 400 score

Originally Posted by TimtheGuy

Do you guys think it sends a bad message when you always talk about "you could be a 500" and get a FHA loan. Technically that is true, BUT how many people are you actually getting qualified who have <580?? 5%??