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HELP! Low credit score, have a cosigner, but need a lender for fha loan!

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Anonymous
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HELP! Low credit score, have a cosigner, but need a lender for fha loan!

I dont understand why everyone in this forum is telling me not to have a cosigner. Smiley Sad I have a cosigner that is a family friend and willing to help a first time home buyer. he doesnt own a home either but has great credit score. our fico score is 570 and we were informed the best chance was to get a cosigner because we fell in love with a specific home, all we need is a $50k loan. my husband makes $25,000 annually (2,000 monthly). we need a lender that is willing to help us in this situation. basically we dont want just our family friend to be on the loan, we want both my husband and him, even though my husband score is 570. if there is a lender out there that is willing to help us in our time of need, i appreciate it. do note that my husband is clearing off his collections cost of 1700 within the next 2 weeks. i want my husband to be on the loan with my family friend because it would help his score to raise up as well. please please please we need your help. please dont tell us not to have the cosigner when the cosigner is there to help u!!!!! we want our dream home and so far a couple of conservative lenders are telling us mixed answers about this. we are located in illinois but i heard many lenders lend in many states. we want a good lender and one that is willing to work with us!!!! asap!!!
Message Edited by kcandjr416 on 01-18-2009 02:57 AM
Message Edited by kcandjr416 on 01-18-2009 03:01 AM
Message 1 of 10
9 REPLIES 9
Anonymous
Not applicable

Re: HELP! Low credit score, have a cosigner, but need a lender for fha loan!


@Anonymous wrote:
I dont understand why everyone in this forum is telling me not to have a cosigner. Smiley Sad I have a cosigner that is a family friend and willing to help a first time home buyer.

 I really don't think anyone's going to recommend  having a co-signer in this forum because, honestly, we know what can happen to that innocent party's credit should something go wrong.
Remember, I've been in your shoes and I know they pinch like the dickens, BUT you have to think: you've made mistakes with your finances in the past -- your present credit situation is testament to that. What makes you so sure that won't happen again? If it DOES, then not only is YOUR credit ruined, but that of your loved one, as well.
 Having a co-signer seems like the easiest solution, but it's really, really not. What do you do if the co-signer dies and their family decides to force you to sell the home and split the proceeds? Also, please remember that if the friend co-signs for you and then wants to buy their OWN home, chances are, they won't be able to. You will have effectively kept THEM from having their own home. 
How comfortable are you with that prospect? Unless they make oodles and oodles more money and have little debts, if they co-sign, they'll have to wait until YOUR mortgage is paid off before THEY can buy a home. Do THEY know that?

he doesnt own a home either but has great credit score. our fico score is 570 and we were informed the best chance was to get a cosigner because we fell in love with a specific home, all we need is a $50k loan. my husband makes $25,000 annually (2,000 monthly). we need a lender that is willing to help us in this situation. basically we dont want just our family friend to be on the loan, we want both my husband and him, even though my husband score is 570. if there is a lender out there that is willing to help us in our time of need, i appreciate it. do note that my husband is clearing off his collections cost of 1700 within the next 2 weeks. i want my husband to be on the loan with my family friend because it would help his score to raise up as well. please please please we need your help. please dont tell us not to have the cosigner when the cosigner is there to help u!!!!! we want our dream home and so far a couple of conservative lenders are telling us mixed answers about this. we are located in illinois but i heard many lenders lend in many states. we want a good lender and one that is willing to work with us!!!! asap!!!
Message Edited by kcandjr416 on 01-18-2009 02:57 AM
Message Edited by kcandjr416 on 01-18-2009 03:01 AM

I honestly would work on YOUR scores before I'd ask a friend or family member to co-sign. You're taking an awful chance with their credit, livelihood and future. And I hate, hate, hate to say this, but it really seems as though you don't care (or really don't understand) what all that entails.

 

And as for the lender insisting on the co-signer being alone on the loan, I really think that's because they don't feel that the loan can be approved at ALL with your DH on being on the loan. Lenders look at ALL borrowers and use the person with the lowest FICOs' mid-score in deciding the interest rate and qualification criteria.

 

So if your DH's credit is THAT bad (again, we've been there, so I'm not judging you one teeny-bit), chances are, his being on the loan AT ALL will cause it to fall through. If that's the case, you're at the "mercy" of your friend -- or if your friend should pass away before the mortgage's paid off, their beneficiaries. So if your friend's child, cousin or  parent decides to sell the house out from under you (since you won't be able to be on the title and have rights of survivorship), you're **blanked**.

 

The ONLY way this will be YOUR home is if you qualify on your own. A co-signer takes away a LOT of rights and stands to hurt the co-signer terribly.

 

And I don't know of ANYONE here who'll disagree with what I've said.

 

Personally, and again, I understand COMPLETELY where you're coming from in terms of wanting to own a home with bad credit, but I really think it's immoral and unethical to put such a good friend's future at risk simply because you don't want to wait to buy a home. Because really, you could have your DH's credit fixed to the point where you COULD buy a home in a few months.

 

Just my two cents. 

Message 2 of 10
Anonymous
Not applicable

Re: HELP! Low credit score, have a cosigner, but need a lender for fha loan!

I think I mentioned this already but if not, paying collections probably won't help your situation any.  In the short term, not all lenders will require these to be paid, so save the cash.  In the long term, paying them without negotiating for them to delete the negative lines will hold his score down until they fall off the report, which could be years from now.. In the meantime, this will affect his insurance rates, etc.

 

Seriously, if he doesn't have any open, positive lines, use the part of income tax refund for a deposit on a secured credit card.  That might get the 10 points he needs.  

 

Aside from the fact that you'll be dragging your friend down with you as Wonderin mentioned, it could take all of a month or two to bring your husband's credit where it needs to be.  To me it seems like with a little effort and a little time, you could leave this monkey off your friend's back Smiley Happy Next time he wants to buy a car, or if he decides he wants to buy a house, you could very well be preventing that from happening.  Even if you pay perfectly, on time every month.  He'll be locked into your decisions for the next 30 years.

 

Good luck to you!  There will be other perfect houses out there.  I sorta know how you feel.  I saw the perfect house but I hadn't saved my down payment yet so I let it go.  When the next perfect house comes along I will be in a much more comfortable position.  In the meantime, maybe you could ask if the seller would consider a lease situation where you rent the house..  That would give you all a couple months to improve your situation.  If you want to continue searching for a loan, you could try a broker who has access to multiple lenders, but it seems like the great majority still require 580+ midscore.

Message 3 of 10
DallasLoanGuy
Super Contributor

Re: HELP! Low credit score, have a cosigner, but need a lender for fha loan!

FHA allows for a non-occupying co-borrower.

Wells fargo, bank of america, wamu should all be able to handle that 

Retired Lender
Message 4 of 10
Anonymous
Not applicable

Re: HELP! Low credit score, have a cosigner, but need a lender for fha loan!

Do both the signer and cosigner have to meet FHA guidelines reagrding credit score, BK, foreclsoure, etc?
Thanks
Message 5 of 10
LisaJ
Frequent Contributor

Re: HELP! Low credit score, have a cosigner, but need a lender for fha loan!

I went through this, as some members will recall.  In my case it was because my DH's scores were too low so we couldn't use his income. We briefly had my dad as a co-borrower.

 

It became obvious that this was a bad idea on many levels. I lowered my expectations a little, they removed my dad, and I qualified on my own.  As a result, I have a house that I can afford on my own, if need be, because I qualified on my own.  It was the best thing that could have happened to me.

 

Also, someone correct me if I am wrong, but for FHA getting a co-signer for credit  score reasons isn't going to help.   

 

I'm sorry. I now how frustrating this can be.  Smiley Sad 

WOW! EQ when I joined myFICO: 657. Ups and downs and a few bumps and bruises, but finally back over 700. Whew!

Message 6 of 10
DallasLoanGuy
Super Contributor

Re: HELP! Low credit score, have a cosigner, but need a lender for fha loan!


@Anonymous wrote:
Do both the signer and cosigner have to meet FHA guidelines reagrding credit score, BK, foreclsoure, etc?
Thanks
 
yes 

 

Retired Lender
Message 7 of 10
fishbjc
Senior Contributor

Re: HELP! Low credit score, have a cosigner, but need a lender for fha loan!

A quick way to ruin a relationship is to get involved financially.  It just doesn't work. 

 

 

 

 

Message 8 of 10
happy0510
Established Contributor

Re: HELP! Low credit score, have a cosigner, but need a lender for fha loan!

We have all been there.  There is no reason to hurry in buying a home.  I would seriously work on bringing up both your scores and then trying then!!


Starting Score: 615
Current Score: 709
Goal Score: 750


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Message 9 of 10
teton
Regular Contributor

Re: HELP! Low credit score, have a cosigner, but need a lender for fha loan!

Just watch a few episodes of Judge Judy or Peoples' Court for a preview of what could happen. Smiley Wink
Message 10 of 10
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