Recently married - Mortgage application

[sdevine42]

I just got married and will be looking to apply for a mortgage for my first house in the next 6-12 months. I've tried to read every post on joint vs. individual loan application and I think I have correctly determined that applying without my DW is the best option. The main reason for this is her substantially lower credit score and $50K of student loans that will require payment when she finishes her master's degree at the end of  this year (I'm debt free other than my CC that is PIF each month). We live in GA which is not a community property state.

The concern I have is that I don't want her student loans included in my DTI calc. 

I think it shouldn't be given what I've read, but if we share a joint checking account that is paying interest on the her loans and will also be making the down payment, would there be any concern on the bank's part?

Thanks for the never-ending stream of knowledge on this board!

[DrZoidberg]

I can answer this as this is my exact situation. We got married in September of last year. We have a joint checking a savingsand thought about a joint application but decided it was best  for just her to do it. I have $60k in student loans and a car. She makes more than me and only has a car payment. They only take her income and her debts. My student loans aren't factored at all. Her credit score is also better than mine . I didn't want to chance getting a bad rate by combining our incomes and debts and scores. For the price we are comfortable with we knew her income was good enough to qualify.

If you  are doing an individual app just make sure your income is good enough and that you have enough in reserves.

*This is all based on my experience with my credit union, your actual experience may vary from lender to lender. 

[DrZoidberg]

Also to add when they wanted to do the verification. Our bank record passed even with both of us contributing. They used only her W2's and they asked for her tax returns (whether joint or single). 

[sdevine42]

Thanks DrZ. Your experience is exactly what we are hoping will happen. Do you know what exactly are they looking to verify when doing a bank record verification?

[DallasLoanGuy]

i have seen tjhis be a problem for an uw.

can you transfer it all to savings?

[DrZoidberg]

The bank account verification looks for deposits not included on your income. For instance, I had a $7100 business reimbursement deposited and they asked what that was and proof. I had to show the reimbursement receipts and such. 

We have both a joing checking and joint savings. My loans and my care are paid from the joint checking and they never questioned it or anything. They won't include her loans unless your name is attached to any of them. We already have our pre-approval and it was solely on my wife's income and her 1 debt which is her car. The DTI was 4% because it was just her car. I hope this helps. 

One thing I will add, this is through the conventional route. I have heard if you do FHA they will include her debts. 

[sdevine42]

I have heard the same thing about FHA. Our plan was to go the conventional route.

That's interesing about the verification...I would think they would be looking closer at money flowing out of the account (hence my concern about her student loan payments) than deposits coming in. I wonder what effects transfers to and from an e*trade account would have? I ask because I planned on keeping the down payment $ in that account until it was time to pay up....

[sdevine42]

RE: DallasLoanGuy

I can easily transfer whatever is needed to savings. What would that accomplish? Sorry, I honestly have a lot to learn about the process.

[DrZoidberg]

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@sdevine42 wrote:

RE: @DallasLoanGuy

I can easily transfer whatever is needed to savings. What would that accomplish? Sorry, I honestly have a lot to learn about the process.

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It just separates what you use for your daily use of expense vs what you have reserved for a house. If you just had a checking account with a lot it may be hard to determine what is actually "saved" for a house. They like to look at your reserves and savings to determine your approval. 

[sdevine42]

Hmmm interesting.....that makes sense. I guess I would want to transfer a slug of $ in my trading account into savings before applying then.