FHA loan

[vikingpride01]

I am in the process of looking for a home. My mortgage scores are pretty good (656,644,666) . My income is 32,000 while my husbands is around $48,000. We both have been on our jobs 12+ years. The only problems is my husbands scores are terrible (400s) due to multiple late payments, and i have a few personal loans/CC with balances. I also have a student loan that I have defaulted on and now its listed as an collection/charge off. I am currently making payments on the student loans. My question is will I qualify for an FHA/USDA loan with my student loan in default. The current amount owed is $10,150.

[renclan]

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@vikingpride01 wrote:

I am in the process of looking for a home. My mortgage scores are pretty good (656,644,666) . My income is 32,000 while my husbands is around $48,000. We both have been on our jobs 12+ years. The only problems is my husbands scores are terrible (400s) due to multiple late payments, and i have a few personal loans/CC with balances. I also have a student loan that I have defaulted on and now its listed as an collection/charge off. I am currently making payments on the student loans. My question is will I qualify for an FHA/USDA loan with my student loan in default. The current amount owed is $10,150.

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Unfortunately, until the defaulted school loan is rehabilitated, you will not qualify for any federal mortgage loans. We were looking for a home until we found out about that. We will have to rehab the defaulted loan by making 9 consecutive monthly payments. You can go a different route that a federal loan, but the conventional loan requires significantly more money down. Needless to say, we are going to try and get our rehab going and start the home buying process again in about a year.  Good luck!

[StartingOver10]

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@vikingpride01 wrote:

I am in the process of looking for a home. My mortgage scores are pretty good (656,644,666) . My income is 32,000 while my husbands is around $48,000. We both have been on our jobs 12+ years. The only problems is my husbands scores are terrible (400s) due to multiple late payments, and i have a few personal loans/CC with balances. I also have a student loan that I have defaulted on and now its listed as an collection/charge off. I am currently making payments on the student loans. My question is will I qualify for an FHA/USDA loan with my student loan in default. The current amount owed is $10,150.

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As pointed out by the previous poster - no, you will need to get your student loan out of default.  It is much better to rehab the loan rather than pay in full with the current delinquency as your late payments will be removed once you complete your rehab which will help your score tremendously.  Don't consolidate the loan either as the late payments will remain on the old tradelines. Rehabbing is the only way to get rid of the lates. Go to the student loan section on this board to get complete information.

This will also give your husband time to get his score up as the lender uses the lowest mid-score of the applicants on the mortgage. Right now he wouldn't qualify so if you need his income you would be out of the market anyway. Spend time in the rebuilding your credit section of the forum for help working on his score too.

[vikingpride01]

Thanks for the info!!