02-12-2013 06:35 AM
Am pretty confident I will qualify for a mortgage at good terms, but this is my wife's and my first home purchase, so are gauging against your experience.
I wonder whether her never having an auto loan in her name drags my wife's scores down (she is ~680)? I had one in my name that began in 2005 and has been paid off for nearly 3 years. I believe we can afford a new car (I really want a new car) but am concerned what a new payment will do to our application this summer? See below for details, and thanks in advance!
02-12-2013 07:16 AM
If the new car payment is added to several other regular monthly payments (including student loans, credit cards with balances, tax payment plans or anything else) then it might make it more dififcult for you to get the amount of house you want. Your DTI isn't bad right now, and I think you're including your rent in that. The lender will not. That said, if you plan to have the credit cards all paid off and aren't looking at a huge monthly car payment, you would probably be OK. Your yearly income might not manage to stretch all the way to 350,000 by itself though, and the car payment will eat into an acceptable monthly payment which effecitvely lowers the amount of house you can afford.
As to whether or not just opening a new car loan will affect your approval? Probably not. It is going to depend on your lender, but there is no harm in reaching out and asking given your situation. If you work with a broker, I would be extremely surprised if they couldn't find a way to make the situation work.
02-12-2013 08:58 AM
Thanks for the quick input! To clarify, the home value/budget we're working on would be ~$350,000, so a mortgage of $300-$310K given the down payment. Believe this would be reasonable with $100K income. We are excited to speak with loan officers about our plans, but I can't help but feel her lack of employment will cause concern.
02-12-2013 09:17 AM
02-12-2013 09:22 AM
Yeah, you are right about the amount. I was half asleep when I wrote that. Not sure how I figured your income being lackluster for a 300-350k loan.
As JM-AM said, there's no harm in not having your wife on the loan. With no income, there's really no reason to.
02-12-2013 11:39 AM
In leaving her off the loan, I imagine I would be doing her credit score a disservice by not having a mortgage on her credit report (that is, one which is paid on time). Is that true? Is this common? Hopefully she wouldn't feel a lack of ownership in not being named to the note, but I've considered discussing the prospect with her as we get closer to shopping time.
Still would feel more comfortable if we had more cash savings than $20K (including gift match).
02-12-2013 11:47 AM
02-12-2013 11:49 AM
That part is kind of true. Her credit would get a boost from having a mortgage which is paid on time.
I believe she can be listed on the loan. The fact that she isn't contributing to the household income won't really count against you, but it sounds like your scores are probably a tier above hers. This would likely result in significantly worse terms for the loan, as the lender would use the lower of your scores to determine those terms.
02-12-2013 11:55 AM
02-12-2013 12:13 PM
Credit scores arent everything. Besides there are plenty of ways to boost her credit down the road.
Agree, and great point.
While we paid for our homes we never put ourselves on the Deed. All our homes are in our Kids names on the Deed. So technically we own nothing. Good thing we have good kids that depend on mom and dad! Lol
Lucky kids! Never thought of doing such a thing, so will keep that in my pocket for down the road when we have some of our own.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.