@Anonymous wrote:
@Anonymous wrote:How long ago were they COed? And, most importantly, is the CA updating the CRAs on the status each month?
They were charged off in july of 2008. There is no CA reporting; the OC (Key Bank) is reporting the charge off each month and told my wife they will continue to do so until they are paid in full.
Ouch. That really sucks. I have to say, since we're rebuilding DH's credit (high 600s ain't good enough), we're desperate for every "goodie" we can get. Our balance NEVER gets updated -- nor the payment history. :/
Is that loan a Federal loan? Or a private loan? AFAIK, only defaulted Federal loans preclude you from the FHA program.
I believe it is a federal Perkins loan, but I am not sure. In fact, my wife it completely unfamiliar with the loan and despite graduating over 5 years ago, has never made a single payment on this loan (credit report states "first payment never received", except for Equifax which still shows that it's in dispute, which was initated months ago...).
If she were to be included on an FHA loan, I'm 99.9% sure that it would have to be rehabbed first. Have you tried rehabbing it?
If PA's not a community state, she can be left out. I know I was. DH is getting an FHA loan all on his lonesome.
How can I determine this?
I just Googled it and PA is NOT a C/P state. Your wife should not have to be on the loan -- nor her debts considered.
HOWEVER, they will want to know why, since you're married, why your spouse is not a co-borrower. They asked me point-blank if I had any government or government-backed debts -- and said that if I did, my debts and their standings would HAVE to be considered.
I don't have any debts like that, but I did ask about the "what ifs" and I was told that any government debts would have to have a payment arrangement (or in the case of SLs, be in rehab) before we could secure the loan.
Of course, I did lose a bit of credibility asking that ... until I reassured him that I was asking only because I'm a member of the FICO forums and it's a question people ask here all the time.
Hers a 599? With a conventional? From talking to a few lenders, I doubt that'd be possible. Even DH, with his high 600s score wouldn't qualify for a conventional.
What about with my score of 701?
I'm 99.9% sure that with a conventional, the lowest score is used: meaning, if you have a 701, and your wife has a 599, her score will determine the interest rate at the very least. Whether qualifying depends on the lowest score, I dunno. :/
I've read that FHA will use the score of the co-borrower with the highest income, but I dunno that for sure.
Nope, that's what we were told, too. So far, that's all they've asked for and we've already passed underwriting (close on the 20th). BUT your issue is regarding counting bonuses and overtime towards your qualifying income. That's a different animal. Only with 2 years worth of W-2s will they be able to see that you didn't just have a "black year" -- and that it's a likely reoccurence.
My 2007 tax return was MUCH lower than my 2008 will be (about half). Since my wife and I are filing taxes jointly, how will that affect the process, if we will only use my income?
Honestly, I think it would be fine. Everyone's income is *supposed* to rise over time. Would you have a good explanation for it? Meaning, you'd not have a reason akin to "Uncle Bob passed away and gave me all his money!" -- something like that, I think, wouldn't fly at all.
To be absolutely honest, I think your chances of going FHA with her on the loan is nil-to-none. She has a government backed debt in poor standing and I really think that she'll have to do something about it before she can get her name on an FHA note.
I think IF you can get her situation corrected/resolved, you'd have one of two choices, mortgage-wise: A conventional with her NOT on it, and an FHA with her on it (since again, I believe that FHA looks at the higher income co-borrower's FICO more strongly).
What do the numbers say, rates-wise, between the two? Could you qualify without her income? Or would her imcome offset the ding you'd get rate-wise?
I think that's probably a personal decision you'll have to make as re your finances and what you can afford.
In our case, I'm not on the loan simply because I have poor credit (high 500s, low 600s at this point) and I have no steady income ... it wasn't worth it to take a chance on a lender NOT using my scores to define our rate, since I had no real, steady income to factor in. Also, I'm sure that with my credit-crappiness, we would have had to jump through more hoops, documentatio-wise, than we wanted. Especially since we're hoping to close in 11 days.
Does that make sense? My brain's kinda fried today. :/