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Does income paid from one spouse to another count?

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Walt_K
Senior Contributor

Does income paid from one spouse to another count?

There are often married couples where one spouse has clean credit yet unfortunately doesn't make enough money to qualify for a loan by themselves.  Is there anything that prevents the other spouse from paying a salary to the spouse with the better credit?  I'm guessing there must be, but curious if there is any way to do this.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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incognitony
Frequent Contributor

Re: Does income paid from one spouse to another count?

I think thats only legal in part of Nevada.Smiley Tongue

Message 2 of 7
doublespaces
Frequent Contributor

Re: Does income paid from one spouse to another count?

That would likely not fly through UW and would probably require 2 years worth of tax returns and you'd be paying double taxes if you were on a w2 then paying her a 'salary'. If you were 1099'd anyway you could try it for the next two years then apply but honestly in two years you could just fix your credit. My credit score went from 500 to 700 in 7 months.

Starting: EQ: 490 TU: ??? EX: ???
Current: EQ: 717 TU: 757 EX: 736 (lender)
Goal: 800+
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Message 3 of 7
Walt_K
Senior Contributor

Re: Does income paid from one spouse to another count?


@doublespaces wrote:

That would likely not fly through UW and would probably require 2 years worth of tax returns and you'd be paying double taxes if you were on a w2 then paying her a 'salary'. If you were 1099'd anyway you could try it for the next two years then apply but honestly in two years you could just fix your credit. My credit score went from 500 to 700 in 7 months.


Makes sense that it would require a certain amount of time to establish that it was a real job.  And that you could probably fix credit problems in that timeframe.  I don't think you have to pay taxes on wages you pay to your spouse though.  Anyway, not something I'm considering.  Just curious as I often see posts where there is in imbalance between the spouse with the best credit and the spouse with the better paying job.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


Take the FICO Fitness Challenge
Message 4 of 7
Booner72
Senior Contributor

Re: Does income paid from one spouse to another count?

A good thing close to this - spouses and "gift" money to the other.  This wouldn't apply when it comes to overall DTI but if it came down to down payment/closing costs, this could easily be done.  Smiley Happy

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
Message 5 of 7
doublespaces
Frequent Contributor

Re: Does income paid from one spouse to another count?

Just gotta find a lender who is willing to turn the blind eye about certain things. Anything could be possible Smiley Happy

Starting: EQ: 490 TU: ??? EX: ???
Current: EQ: 717 TU: 757 EX: 736 (lender)
Goal: 800+
=============
Amex: Zync, Gold Delta
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Chase Slate
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Message 6 of 7
ShanetheMortgageMan
Super Contributor

Re: Does income paid from one spouse to another count?


@doublespaces wrote:

Just gotta find a lender who is willing to turn the blind eye about certain things. Anything could be possible Smiley Happy


Heh, yes, including the meltdown of the United States real estate industry.

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