Are my goals achievable?

[ShanetheMortgageMan]

Your husband would have to be on the mortgage in order to use his VA Benefits.

Time since delinquencies is more important that low utilization on revolving accounts.  I'd recommend you don't pay them until after you buy the home... or worst case, since you are willing to do so, pay them at the loan closing if the lender requires you to.  If the lender requires you to, and you don't have the funds yet, you might want to talk to another lender.

Welcome!

[Anonymous]

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.

[ShanetheMortgageMan]

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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.

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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.

[Anonymous]

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.

[ShanetheMortgageMan]

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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.

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Yeah it's tough finding people in this industry who are making a career out of what they do, rather than just a job until they figure out what they want to do in life.

[Laurenlou]

Wow! Thanks for all of the good info!

Let me see if I have this right:

Husband can file for bankruptcy and technically have no debts, except for his student loans, right? Those will be in deferment until he graduates, which will be after closing on the house. So do we need to include those payments in our DTI calculation?

Also, if we include his debts, its only fair to include his income. But since he won't be on the loan, can we include his income? Is it just the borrower's DTI or the household's DTI?

Lastly, is DTI calculated with gross monthly income, or take-home income?

[Anonymous]

you can not include income unless the person is on the loan.

Yes, you will have to include student loans

if the BK has any repayments included these will be used as well (not sure which BK you are going for)

Gross income is used for DTI.  1 thing though, with borderline cases in particular, they may want to average 2 years income for the total so if you are basing it upon a current payraise, etc it may not hold up.

[ShanetheMortgageMan]

If I remember correctly, Texas laws exclude some debt being both spouses responsibility... Dallas knows much more about this than I do.