Joint Mortgage Credit Score Calculations?

[Anonymous]

I've been doing some research and there isn't a definitive answer as to what is the norm for lenders when you have a joint mortgage.  Some say most lenders look at the 3 scores from each individual, take the median score from each and then the average from those two scores, 

example: If Bob has 800, 820 & 750 med: 800 Sally has 650, 680, 587 med 650 = average score of 725. 

Other sites say they take the lower score of both: 587

One said they take the median score of the person with the higher earnings.

Some say the "Average Score" 800, 820, 750 = 790

Others say the  "Median Score" 800

It's very confusing they all seem to contradict each other - Whats the deal? what's the normal calculations??? Does A+B=C?

[Believe1970]

We were told it's the middle score of the person with the lower scores.

[Booner72]

It is most definitely the middle of the lowest score holder. 

[BN3]

Middle of Lowest.

[Booner72]

In the scenario described above, it would be Sally with 650.

[Anonymous]

http://www.mortgageloan.com/obtaining-a-joint-mortgage-or-shared-home-ownership-3502

http://themortgageinfoguide.com/articles/credit_scores/whose_fico_score_is_used_on_a_joint_mortgage....

Most sites say the scores of the person that is the highest earner is used -  does that make a difference?

[ShanetheMortgageMan]

ARod - those sites are incorrect.  It's the lowest qualifying score of all borrowers.  Each borrowers qualifying score is the middle of 3, or the lowest of 2.

[Anonymous]

Thank you for all your responses and clarifying.

[Anonymous]

Thank you all for this very helpful information! I just have three more questions.

My husband and I are preparing to purchase our first home this November (2012). My scores, 5 Aug: TU (777) & EQ (772); my husband's scores, 5 Aug: TU (709) & EQ (709). The home we are looking at is priced $124,900 in Georgia. We are planning to do a conventional, fixed-rate mortgage for 20 yrs, paying 20 percent down and all closing costs out-of-pocket. Our current DTI is only 9 percent, based only on my husband's income (yes, this is accurate), and our DTI with the new home would be only 27 percent, based only on my husband's income. We have no debt other than $3000 left on a car loan. My husband is active duty enlisted military; and I work for the military in the GS system. I will be leaving my job to have our first child. Instead of returning to work, I plan to start working on my doctorate in fall 2013 (free tuition + $14,000 annual stipend for school-related expenses), which means I will no longer be earning a contributing income, but, more importantly, will not be adding any extra debt.

Based upon our situation, would it make any sense, or be of any benefit to me/us, to apply jointly with my husband for this new mortgage? My initial thought was that my credit scores would get us a better interest rate. However, after reading this post, it sounds like they will only look at my husband's scores anyway, correct?

Also, I've been working like crazy to try and help my husband get his scores up to 720 by November. Even if he doesn't make that benchmark score, in your experience, would a conventional loan still be the best bet? Or, should we be looking at other options, such as a VA loan? We make a modest income and I have had us on a very tight budget for the past two years to eliminate our debt load, which was once over $63,000 due mainly to our student loans. I just want to keep us heading down the right path.

Last question, I've been checking loan rates and we can get the best deal through Service Credit Union's military branch. Do credit unions and national banks affect credit scores differently when it comes to obtaining and paying on a mortgage?

Thank you so much for considering my questions! This is a very big step for us!