refi question: better to apply jointly or individually if our credit scores vary

[sachajl]

My husband and I are looking to refinance our existing ARM mortgage that just recently reset.  We'd like to get the lowest possible rate since we expect to keep the house for a long time.  My husband's credit score is about 70 points lower than mine-- not because of any baddies but because of his relatively short credit history (he moved to the states from Ireland about 7 years ago and only established credit about 5 years ago). To qualify for the best rate should we apply jointly or attempt to qualify on my credit alone?  Would we even qualify on my income alone?

My middle score is 743

My annual salary is appx $118

I have no revolving debt

His middle score is 678

His salary is appx $103

He has no credit card debt but a car loan for about $400/month

We need to borrow about $354k 

[Lel]

If you have no other debt (not just revolving, but things like car loans and student loans), then I think you should be able to qualify on your income alone).

If you apply jointly, the lender will look at your husband's middle score.  This could result in a higher interest rate.

Even if your husband is not on the loan, if he is on the title then he will have to sign the new deed of trust acknowledging that he gives you permission to refinance.

[Anonymous]

You can go either way about it. I am sure that a current mortgage on his credit file will boost his scores but then again you can do it individually. Either of your income is good enough to qualify for the loan you are asking.

[sachajl]

Thanks for the response.  I don't have any debt at all (other than the mortgage I'm looking to refinance).  I have three credit cards that I've recently paid off in anticipation of the refi and no car or student loans. 

The $400/month car loan is the only debt my husband has as his two credit cards have zero balances as well.

However, I hadn't thought about the fact that the mortgage would help improve his credit score so we'll have to weigh that in I suppose...

[ShanetheMortgageMan]

How much is the home's value?

[sachajl]

The home is currently appraised for about $480k.

[ShanetheMortgageMan]

I was going to say if you had 40% or more equity, then his lower scores wouldn't even be an issue, but since you don't have that much equity his scores will negatively impact the interest rate you could get (plan on paying 1.25 points origination to get the same rate as someone with a 740 score would have to pay no points to get, if he had a 680-699 score it'd only be .5 origination fee for the same rate as a 740 score).  So if that is a concern of yours I'd just apply for the refinance on your own.