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True on they'll include the non-borrowing spouses debts in the debt to income ratio, but not any of the judgments, BK's, etc. The husband could be going through a BK and it wouldn't count against the wife if the mortgage is only being applied for in the wife's name.
mickie08 wrote:One thing to consider..If you are in a community property state and are applying for an FHA or any other federal government loan, your husbands debt will be counted against the DTI even if he is not on the loan. They can not deny the loan based upon the credit worthiness of the spouse, but they have to take both parties debts into consideration for DTI. That also means any straight disqualifying factors from what I was told by the HUD person I talked to (including a judgement or BK within 12 months) I am not 100% sure on the BK or judgement stuff, but if you are in a community property state and going for a FHA loan, you will be unable to in your current situtation. ( I am in the middle of a similiar situtaion right now) I assume since you did not mention any down payment situation that FHA is probably one of the only options. Most banks seem to be sticking to the 10-15% down minimum and then only with 650+ mid FICO score. In a year it may relax some, but it may also tighten up.
mickie08 wrote:Good to know. It kills me how lacking in knowledge the call center people are at HUD even when talking to the underwriting department... That No purchasing spouse part definitely caught me off guard when we started looking.