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Tahul
Posts: 4
Registered: ‎08-22-2012
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Getting a VA Loan with Veteran spouse with bad credit

Hello experts, Here is my scenario can be a little complicated. I sold my home in a short sale in December 2009 which will be three years in December 2012. I can get the FHA loan but dont like the idea of PMI insurance which can be up to $200 on a $250K loan. I am also willing to put down 20% My wife is a veteran but has bad credit, not sure how soon it can be fixed. With interest rates being low, waiting 6 months to fix can be a bad idea. Can i co-sign with my wife and get a VA loan?
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jnkp2001
Posts: 135
Registered: ‎01-04-2012
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Re: Getting a VA Loan with Veteran spouse with bad credit


Tahul wrote:
Hello experts, Here is my scenario can be a little complicated. I sold my home in a short sale in December 2009 which will be three years in December 2012. I can get the FHA loan but dont like the idea of PMI insurance which can be up to $200 on a $250K loan. I am also willing to put down 20% My wife is a veteran but has bad credit, not sure how soon it can be fixed. With interest rates being low, waiting 6 months to fix can be a bad idea. Can i co-sign with my wife and get a VA loan?

They take the lower of the two scores.  I believe the lowest score is 620 with VA.

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MrChairman
Posts: 461
Registered: ‎02-07-2010
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Re: Getting a VA Loan with Veteran spouse with bad credit

I am currently in the situation as the OP. I am still active duty and my wife is a vet who has bad credit. They just took her off the loan and used my income only. We will hear back within the next couple of week weather we are approved or not.


Starting Score:TransUnion: 698 (12 FEB 2010), Equifax: 674 (12 FEB 2010)
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seigex
Posts: 425
Registered: ‎05-16-2012
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Re: Getting a VA Loan with Veteran spouse with bad credit


MrChairman wrote:

I am currently in the situation as the OP. I am still active duty and my wife is a vet who has bad credit. They just took her off the loan and used my income only. We will hear back within the next couple of week weather we are approved or not.


I think the difference with the OP is he's a civilian looking to use his wife's VA but without her on the loan due to her bad credit. Not sure, but check to see if she can transfer her benefit to you... I know with Post-9/11 GI Bill you can, but don't know if they extended that to VA Loan eligability...

Lender Pull (11/3/12) FICO EX: 740 EQ: 680 TU: 702

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Asailorshort
Posts: 205
Registered: ‎06-04-2012
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Re: Getting a VA Loan with Veteran spouse with bad credit

Tahul,  unfortunately va mortgage benefits aren't transferrable.  If you're not a vet yourself than her name will have to be on any va mortgage.  Do you know her current score?  Also, you said you'd be willing to put down 20%.  With 20% down, you could just use a conventional mortgage.  I also believe it depends on the state whether both spouses have to be on a mortgage.  In many states, its fine to have only one spouse on the mortgage, but there are some that require both spouses, so thatmay be worth some research on your states rules.  Also, different rules may apply depending on whether its a primarary residence, a summer house or an income property.  (But since you are talking about fha snd va loans, i'm assuming you're talking about a primary residence).

Starting FICO 667 (5/2012) EQ
672 (7/2012) EQ. 681 (8/1/12) EQ
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seigex
Posts: 425
Registered: ‎05-16-2012
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Re: Getting a VA Loan with Veteran spouse with bad credit

[ Edited ]

Asailorshort wrote:

Tahul,  unfortunately va mortgage benefits aren't transferrable.  If you're not a vet yourself than her name will have to be on any va mortgage.  Do you know her current score?  Also, you said you'd be willing to put down 20%.  With 20% down, you could just use a conventional mortgage.  I also believe it depends on the state whether both spouses have to be on a mortgage.  In many states, its fine to have only one spouse on the mortgage, but there are some that require both spouses, so thatmay be worth some research on your states rules.  Also, different rules may apply depending on whether its a primarary residence, a summer house or an income property.  (But since you are talking about fha snd va loans, i'm assuming you're talking about a primary residence).


In community property states you can keep the spouse off the loan, but they have to sign a quit-deed before the loan will fund (I'm going through this right now). However, their monthly payments on their credit will count towards your DTI, but their negatives (collections etc) won't,.

 

As far as convetional I would agree... you don't have to pay the VA funding fee w/ a conventional, plus if you're putting 20% down you wont' have PMI, which is one of the main reasons to get the VA loan.. also you don't have to go through a VA appraisal (they are sticklers, and there's a list of reasons they won't approve the sale).

Lender Pull (11/3/12) FICO EX: 740 EQ: 680 TU: 702

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Asailorshort
Posts: 205
Registered: ‎06-04-2012
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Re: Getting a VA Loan with Veteran spouse with bad credit

Thanks for the clarification on community property states seigex!  I never really knew exactly how that worked.  

Starting FICO 667 (5/2012) EQ
672 (7/2012) EQ. 681 (8/1/12) EQ
Current FICO 682 (10/13/12) EQ; 718 (10/13/12) TU
Goal: 760+ but 700-720 by jan 2013
No new apps tll jul 2013
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seigex
Posts: 425
Registered: ‎05-16-2012
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Re: Getting a VA Loan with Veteran spouse with bad credit


Asailorshort wrote:

Thanks for the clarification on community property states seigex!  I never really knew exactly how that worked.  


np! I didn't know either till recently, if my wife's (pre-marriage) bad credit factored in I wouldn't be able to get a house for years :smileyhappy:

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