Husband/wife USDA loan

[Nebunatyk]

Ok I have a complicated question. Me and my wife are looking to buy a home In a USDA zone. This means first time buyers can do 0% down. Here's the thing. My wife has excellent credit , good job and is a first time buyer. Unfortunately I have horrible credit, foreclosed on a home about 7 years ago so I am not a first time buyer. My question is can my wife apply for the mortgage on her own and keep me off so my bad credit won't count against us. Am I forced to get a credit check because we are married? Any help/advice/answers would be greatly appreciated. Before we go talk to someone and waste putting inquires on her credit report I wanna see where we stand

[Nebunatyk]

Forgot to add this is in New Jersey, zip code 08234

[Genkeim]

I beleive it all has to do with if you're in a community properity state. Someone with more knowledge about it will have to answer that. 

USDA isn't a first time homeowner loan though, you can own previous homes and still get a USDA loan. Also every first time hownowner plan that I've seen just states that you can't have owned a home in the last 3 years. Beyond that you're a first time owner again. The important thing is USDA doesn't have first time owner as a requirement.

Just how bad is your credit? I'd have to look it up but I think a 7yr old FC is allowed by USDA. late payments in the last 12 months would be a killer and your credit scores would need to be over 620 or 640 depending on the lender. USDA requires 620+ but all the lenders I've delt with require 640+ and with 660+ they're not as strict on some things.

[Nebunatyk]

Mines about 640. Last 12 months I have a car lease paid on time and a few CC I charge a couple Hundo every month and pay off. Problem is I was young and dumb. Tons of delinquent , late payments, collections, public records Etc. like I said last 12 months is good but its messy. My wife has 3 CC and 2 retail. Charges and pays off same month, stellar history and a 760 score. Our goal is to get approved for 265k no money down and we will pay the closing costs upfront. My wife is a bartender so works on tips. Her bi-weekly statement shows 2400-2700 NET every single paycheck, so lets call it 5k monthly net. You think she will qualify with 5knet monthly and a 760 score with zero other debt and a few CCs with a total of 5k credit line

[StartingOver10]

Depends upon what her tax returns say.

[Nebunatyk]

Her tax return will show she declared roughly 2500$ bi-weekly. When we get her paycheck we can see her Ytd and decided tips. She gets paid 5.50 an hour so her actual paycheck is Close to zero every week. Her paycheck covers the extra taxes from her declared tips. Her W2 will show a yearly NET INCOME of about 50,000.

My last question thanks guys for your help. My wife's last job made 40k a year salary. She went in maternity leave and then quit tnat job last year. She has only been at her new job 4 months. How long does she have to be at her new job with her new 5k a month income for a lender to accept that as her income . Her job history is stable. Same job for 5 years and then her current job she has now

[HoldingOntoHope]

Well most mortgage lenders are going to want to see tax returns for the last two years and if there is a difference they will generally average the income. I think it is going to be quite a stretch for your wife to qualify for $265K based on her income alone. If they need your income on the loan then they will need your credit also. You said that your last 12 months is "messy" but if you do not have any late payments then there is a chance. Your past credit problems will need to be looked at by the loan officer and or underwriter to determine what can be overlooked and what will need to be paid off.

Bottom line is that if you are denied at this time then it simply means that you are not ready "Right now" to purchase a home. With a little work to straighten out your credit and a little time for your wife's income to count it could all come together in the not too distant future.

[Lemontwist4]

I live in Ohio and the lenders have no issue not putting me on the loan at all they didn't even pull my credit however because we are married I will have to be on the deed. That being said it might be different for you because of your income I am a full time student and had to show them proof of being a full time student and write a LOE telling them the last time I worked ect. So because I currently make no money keeping me off will not affect the income guidelines you have to fall within to get a USDA loan.

[Nebunatyk]

My credit score is 650. The past 12 months has all CCs paid off then my monthly charges paid off every month, never late. I also have a car lease I've never missed or was late. Problem is i have a few closed collections accounts i never paid 4-6 years ago , a foreclosure and 3 Public records due to the foreclosure and tnat situation . Also when I went to get my lease with a consigner tney ran 17 inquires which I tried to fight but couldn't get removed. We will talk with Theban officer this week and see what our best shot is , but with my wife's income /credit would a 250k loan with 15k down be unrealistic.

[Genkeim]

You may not be in as bad of shape as you think. Also when you're car or mortgage shopping the inq's will be lumped together so it'll only count as 1. Make sure you go over everything with the LO, could be you just need to provide some letters of explanation and you'll be ok.