U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 1.5 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Jump to a detailed profile or search
site with Google Custom Search

Search Forums  (Advanced)
Business Search - 14 Million verified businesses
Search for:  near: 
Reply Start New Thread
 
Old 02-17-2008, 10:25 AM
 
5 posts, read 113,145 times
Reputation: 26
Default FHA loan requirements/does spouse have to be on loan?

Hello,
My husband and I just got married in december and are looking to buy a home. First time buyers. My question is do we have to include my name as a co-borrower? Do they look at my credit score? That's where I'm worried.W e also be looking to use FHA.
Reply With Quote Quick reply to this message

 
Old 02-17-2008, 01:55 PM
 
Location: Salem, OR
10,674 posts, read 16,960,411 times
Reputation: 6519
It's not uncommon to see people apply together for a loan and then one person taken off. If you are going to rely on both of your incomes to purchase the home, then yes, they will rely on your credit score.

You may have to pay a little bit more for your credit score in terms of an interest rate. It just depends on how bad your credit is. You don't have to be a borrower to appear on the deed. So you can be part owner without being on the mortgage.
Reply With Quote Quick reply to this message
 
Old 02-17-2008, 05:41 PM
 
5 posts, read 113,145 times
Reputation: 26
Well, with my score less than 600, I'm not sure it would work...I know I read somwhere that I don't have to be a borrower, but my income would have to be included because I'm a student and work. I thought FHA didnt work by credit scores??
Reply With Quote Quick reply to this message
 
Old 02-17-2008, 08:19 PM
 
Location: Culloden WV
78 posts, read 303,596 times
Reputation: 33
Default you are right.

It isn't driven by score, but by many other factors, good rental history if needed) and other pay history in the last twelve months is a key factor.

500's can be done but they are getting tougher. See, FHA isn't score driven but banks have their own policies on who they will approve.

Never know though, you might be in better situation for FHA than you though!
Reply With Quote Quick reply to this message
 
Old 02-17-2008, 09:16 PM
 
Location: Las Vegas, Centennial Hills
2,013 posts, read 4,356,506 times
Reputation: 829
You do not have to be on the loan but they will need to run your credit. The purpose of this is that any debts that you may hold in your name will need to be calculated into the debt to income ratio. However, even though your debts would be included your income would not. FWIW, most lenders have a floor FICO requirement of 580, so if you have a higher FICO than 580 than you should not need to go with manual underwriting and depending on any derogatory credit that I may not know about (there is usually derogatory credit with a FICO less than 600), not including medical collections, should go through the FHA TOTAL scorecard automated underwriting system fairly easily, provided the debt to income ratios are not exceedingly high.

I also wanted to add that FHA rates are what they are. A FHA borrower with a 700 FICO will not get any better rate than a FHA borrower with a 600 FICO.
Reply With Quote Quick reply to this message
 
Old 02-18-2008, 01:52 AM
 
Location: CNJ/NYC
1,227 posts, read 2,780,178 times
Reputation: 406
Quote:
Originally Posted by vday2004 View Post
Well, with my score less than 600, I'm not sure it would work...I know I read somwhere that I don't have to be a borrower, but my income would have to be included because I'm a student and work. I thought FHA didnt work by credit scores??
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.
Reply With Quote Quick reply to this message
 
Old 02-18-2008, 07:42 AM
 
2,368 posts, read 5,137,562 times
Reputation: 2855
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.
Reply With Quote Quick reply to this message
 
Old 02-18-2008, 08:00 AM
 
5 posts, read 113,145 times
Reputation: 26
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.
Reply With Quote Quick reply to this message
 
Old 02-18-2008, 10:14 AM
 
5 posts, read 113,145 times
Reputation: 26
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??
Reply With Quote Quick reply to this message
 
Old 02-18-2008, 10:16 AM
 
Location: CNJ/NYC
1,227 posts, read 2,780,178 times
Reputation: 406
Quote:
Originally Posted by vday2004 View Post
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.
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.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $79,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages

All times are GMT -6.

2005-2014, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25 - Top