FHA mortgage help

[samy2576]

Ok, I am going to keep this simple as possible 

Basically my husband has terrible credit (score around 590) and massive student loan debt (over $45,000) with late payments, last one being about a year- 1 1/2 years ago.

Income is around $40,000.

I have decent credit, score around 640. I have little debt (~$9,000) and not a single late payment on my credit.

Income is around 20,000.

I feel like if we apply for a mortgage together, we will get denied. Do you think that would be the case? Houses we are looking at are between 80 and 90k.

How could I work it so that I apply for the mortgage myself? We do not live in a comm prop state.

Could I have him write a letter stating he will give me $700 a month for expenses? (He pays our rent for that amount currently.) That way I could include part of his income?

We have always paid our rent on time and he has been improving his credit (it used to be around 510) but we are tired of waiting.

Any help would be great.

[IOBA]

With joint applications, the lender takes the lowest middle score.   With your DH's scores below 620 (the usual lowest score accepted, although that is not always the case), it is unlikely that you would be approved as joint applicants.

If you are applying by yourself, it would be based on your income alone.  

Typically, an UW would look at total debt and figure your monthly payment is 2%.   Two percent of 9k is $180.

Typically, an UW would not allow DTI (to include mortgage) to be higher than 25-30% of the loan.   Twenty-five percent DTI would be $416.66 and thirty percent DTI would be $499.99.

Take those numbers, minus the other debt and you have the highest possible mortgage payment allowed (sometimes there are exceptions).

$416.66-180.00=$236.66

$499.99-180.00=$319.99

The mortgage payment would need to include (most likely) escrow (taxes and insurance).

* My suggestion would be to keep paying down your debt.   

* Talk to a lender and see what a mortgage payment would be on a 80-90k home.

* Don't apply for any new credit.

* Keep working on DH's credit scores.

IMO, it would be tough to get a mortgage based on your current debt income and debt.   BUT it might happen.  Do you have a lot of money to put down?

[samy2576]

I'm sorry I left out a few things. My debt is student loans and only some are currently in repayment for $70 a month.
DH loans are all in repayment. We have $6000 for down payment.

[IOBA]

Ok, what is the total monthly payment for ALL student loans (yours, in repayment status and not)?

Any other monthly debt that shows up on your credit report?

[StartingOver10]

No, your husband can not write a letter saying he will pay $700/month to you and have that used as your income. FHA will allow a gift for down payment for you so he can help you that way.

Your best strategy here is to work on your husbands credit so that his scores increase above 620.

Or increase your income so that you can qualify for the loan on your own.

Are you working full time?

Is your income W-2 type income or 1099 type income? How about your husband? Is his income W-2 type or 1099 type?

You have already increased your husband's score substantially, even if it doesn't feel like it. You have done the hard part. As you begin working on his score again, you will be able to increase it further this time. The higher you go the easier it gets up to a point. Did you read some of the success stories in the rebuilding forum? There are people on here that are truly inspirational. Look at the credit journey by p-