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Will my husbands bad credit hurt our chances at getting a home loan

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Anonymous
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Will my husbands bad credit hurt our chances at getting a home loan

We are looking to buy a house before the rebate deadline for the credit. My husbands credit score is 550 and mine is 750. Where should we go look for a home loan at? FHA lender or Bank? My husband paid off all this collection in April and I never had a late payment in my life. We live in Minnesota and does that mean we have to apply together to get a loan or can I use his income without him being on the loan. Our gross income is 77000 yearly. We don't have too much money for a down payment right now (3500) but will by the end of the summer around 10000. Will my good credit over see his bad credit or will it average out. If we went to a bank would we qualify for a first time home buyers loan or a regular home loan? His most recent late was reported in march. Hopefully this will answer most questions? We both have car loans and student loans which total 920 a month and I am curently paid to zero on all my credit cards. I have three that are 12000 and zero balance.

Message 1 of 8
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Anonymous
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Re: Will my husbands bad credit hurt our chances at getting a home loan

Using his income and his credit scores means you can't get a home loan.

 

Is there Any way you can qualify with your income and scores alone?

 

Unfortunately the score they use is the Middle Lowest Score of all borrowers...........so yes his credit will get you denied for a home loan.

 

Also, FHA requires 12 months clean credit....and requires 3.5% down of the purchase price. 

 

I suggest posting a quick snapshot of his credit reports on the rebuilding credit forum.......There IS time to get his scores to 620 before the deadline, depending on the "baddies" on his report. 

 

Good Luck! 

Message 2 of 8
Anonymous
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Re: Will my husbands bad credit hurt our chances at getting a home loan

Minnesota is not a community property state. However, you'd have to be able to qualify on your own. Meaning they won't include his scores, his debts, or his income.

 

Your debt is kind of high but that wouldn't be a problem if they're in his name and you have the larger chunk of income. What price range are you looking at?

Message 3 of 8
Anonymous
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Re: Will my husbands bad credit hurt our chances at getting a home loan

Well we found a couple of houses in the 170000 and 180000 range. I make 39900 a year and he makes 41000 a year. We just both got dollar raises. I pay for my car and student loans which are 340 and 135  and thats it. His car is 280 and student loan is 170 month. I recently as of today paid off my last credit card and have zero credit card debt. Our loan officer said if we don't qualify for a fha loan there we could go to a bank and get approved. She ran a similation run there and we qualified for 200000 there if we were approved. But said that his old collections are still showing late payments as of last month even though we paid them off in March and one off on the first week of April. If I go in by myself I will only get about 100000 and not enough for my house I was looking for.

Message 4 of 8
Anonymous
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Re: Will my husbands bad credit hurt our chances at getting a home loan

Unfortunately you're unlikely to get approved by a bank with his scores and late payments. FHA has less strict requirements than conventional and even if you did get approved for a conventional loan you would have crazy high interest rates and need a very large downpayment.

 

I understand how you feel, your credit is good and you feel it should be considered but when they look at you as a couple they really only see the weaker partner when assessing risk.

 

Can you explain what the collections and lates are specifically? I can't really tell but it sort of sounds like old collections were re-aging. Typically you want to make a deal with the creditors before paying them to get them to delete once paid. Sometimes they'll work with you after though.

Message 5 of 8
Anonymous
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Re: Will my husbands bad credit hurt our chances at getting a home loan

I know one big bank in MN will do fico score 550 for  fha with good interest rate if you have 3.5% down.

 

Message 6 of 8
Anonymous
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Re: Will my husbands bad credit hurt our chances at getting a home loan

Which bank is that. We will have that much saved in a month or so. Thanks for your help KDX.
Message 7 of 8
DallasLoanGuy
Super Contributor

Re: Will my husbands bad credit hurt our chances at getting a home loan

you need to address the scores.

have you visited the credit forum? 

Retired Lender
Message 8 of 8
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