topic Re: House loan question: Good credit with no income in Mortgage Loans

House loan question: Good credit with no income

Hopeforchange — Sun, 10 Feb 2013 02:44:59 GMT

My husband and I both agree we would like to own a home. We have the down payment but credit is the question. I have a good score in the 710-760 range. He however has a less then perfect score around 610-650. I would like to spend the next year cleaning up his credit, where he would like to purchase now. He seems to think that my score would even be considered. I disagree because I am a SAHM with no income. I don't think my credit even matters. Does it?

Re: House loan question: Good credit with no income

Anonymous — Sun, 10 Feb 2013 03:12:52 GMT

@Hopeforchange wrote:
My husband and I both agree we would like to own a home. We have the down payment but credit is the question. I have a good score in the 710-760 range. He however has a less then perfect score around 610-650. I would like to spend the next year cleaning up his credit, where he would like to purchase now. He seems to think that my score would even be considered. I disagree because I am a SAHM with no income. I don't think my credit even matters. Does it?

If you are on the loan your credit matters. If you are in a community property state your credit matters.

You have numbers in ranges for scores, where did you get your scores from? If you let us know where you obtained your score, we can give you a better idea.

If they are FICO scores, then maybe still qualifiable scores, have to know the middle scores?

How much is yearly income?

How long employed?

How much debt are you paying out monthly?

What type pf debt is it? (Such as car payments, CC's, etc etc)

How much is the home you are looking at?

Re: House loan question: Good credit with no income

Hopeforchange — Sun, 10 Feb 2013 03:34:37 GMT

We both haven't looked at our scores in a year, so it's an estimate from an online calculator. His was 650 and mine was 720 before financing our car. I'm going to pull them again soon.

His W2 was 36,000 and 1099 4,800. He's been employed at his job 3 years.

The car is 441 a month. It was 26,000 at signing down to 19,898. Cards are total 102, student loans 50 a month.

I personally would like a house for no more than 70,000 and he's thinking 100. At 70 we have 10 percent down.

Re: House loan question: Good credit with no income

Anonymous — Sun, 10 Feb 2013 03:42:07 GMT

@Hopeforchange wrote:
We both haven't looked at our scores in a year, so it's an estimate from an online calculator. His was 650 and mine was 720 before financing our car. I'm going to pull them again soon.

His W2 was 36,000 and 1099 4,800. He's been employed at his job 3 years.

The car is 441 a month. It was 26,000 at signing down to 19,898. Cards are total 102, student loans 50 a month.

I personally would like a house for no more than 70,000 and he's thinking 100. At 70 we have 10 percent down.

If you have a clean history since you pulled them a year ago then they shouldnt be worse, unless you applied for a lot of new credit.

I would just pull the Equifax score and TU score from here, for your Husband. The Equifax will be probably exact to a lender pull, and yout TU will have some variation as they are different scoring models. But on these two scores from MYFICO you can get a very good idea if your scores will qualify.

Re: House loan question: Good credit with no income

Hopeforchange — Sun, 10 Feb 2013 03:52:19 GMT

I thought the car loan would bring it down, but we do pay more on it most months.

Oh and we don't live in a community property state.

Re: House loan question: Good credit with no income

Anonymous — Sun, 10 Feb 2013 04:02:40 GMT

Really depends on what else is on reports.

You take a hit on scores for INQ and new account, but it is short lived. Also if you had no open installment loans you could have actually seen a boost in scores since it added to your mix in credit. Obviously YMMV, but in my opinion even if impacted your scores, it should be recovering back to original scores between 6 months to a year, pending nothing else is reporting negatively to impact your scores, and you been paying all your bills on time.

Re: House loan question: Good credit with no income

Hopeforchange — Sun, 10 Feb 2013 04:19:31 GMT

Ok, thank you. There shouldn't be anything negative for the past three years, but he did place student loans into forbearance. I just think another year of paying on the car would do his credit good. Guess I'll pull reports tomorrow.

Re: House loan question: Good credit with no income

Anonymous — Sun, 10 Feb 2013 04:27:04 GMT

Installment loans (car payments) really dont have much of an impact in scoring.

Your revolving debt (CC's) has a much bigger impact.

I think if everything is up to date and on time since your last pull a year ago, with all things being the same, your scores would be the same or better since last pull.

Re: House loan question: Good credit with no income

Hopeforchange — Sun, 10 Feb 2013 04:33:45 GMT

I thought auto loans meant more so I've been putting more on that and minimum on cards that have balances. Is charging and paying in full better than just leaving them open untouched?

Re: House loan question: Good credit with no income

Anonymous — Sun, 10 Feb 2013 04:59:48 GMT

For scoring purposes it is best to have all cards but one have a 0 balance when statement hits.

Example..

You have 3 credit cards

Card 1--- 500 limit

--- 200 balance

--- 30 minimum payment

Card 2 --- 1000 limit

--- 150 balance

--- 30 minimum payment

Card 3 --- 1500 limit

--- 50 balance

--- 30 minimum payment

Pay off card1 in full as soon as you can.

Pay off card3 in full as soon as you can.

Pay down card2 to keep a balance from 5 dollars to 90 dollars I opt for 5 - 50 dollars monthly.

This does not mean you cant use your cards, it just means to pay 2 of them off before the statement hits, and keep the 3rd card with a balance of 1-9%.

If you handle this properly it gives you the best scoring situation. Also if you pay the balance on the third card in full when statement hits you are not charged interest. You just make another small charge to keep that small balance reporting from month to month.

Re: House loan question: Good credit with no income

Hopeforchange — Sun, 10 Feb 2013 05:09:27 GMT

Thank you very much. That is what I will do with his two cards then.

Re: House loan question: Good credit with no income

Hopeforchange — Mon, 11 Feb 2013 16:57:32 GMT

Ok, I still have a couple questions I hope you or someone else can answer I made this post while my husband was at work so I had a chance to talk to him yesterday.

He applied for a capitol one card about 4 months ago. The card he got said he had to have a credit score of at least 650 to get it. He was approved. Well he maxed it out, 1,000 and his other card 300. How much do you think his credit took a hit?

I paid half of the 300 last month. We are down to about 143. We have 1,000 left over this month after bills. I want to pay these cards off in hopes of helping his score. I also want to add to our savings so we have more than 10% for a down payment. I was think 600 in savings, 300 towards cards each month. Should I pay the 300 one down to 30% then start working on the 1,000 (its at 901 now). Or should I pay off the 300 one this month, leave it at zero and start on the second one?

Ok, next question. The 1,000 card he took $200 in cash out on. I know, he got an ear full. So there is 24.4% interest on that but 0% on the rest for 24 months. If I pay off $200 will they apply that to the cash first?

Another question (I am a pain I know) My credit cards have much higher limits. If I add him to my accounts as a card holder will that help his credit at all?

TIA.

Re: House loan question: Good credit with no income

Anonymous — Mon, 11 Feb 2013 17:24:13 GMT

Yes. If your cards are in good standing and not maxed out, it will be beneficial to add him as an authorized user.

When you pay $200 on the card, I think they apply it to the oldest charges first. So depending on how recent it is, it might not be paid off. But you can always call them to see for sure.

I would get the $300 one at 30% and then work on the same for the 1,000 one. Then go back to the $300 one and pay it to zero. If you can do it all in one swoop, you want 30% on the 1,000 limit card and zero on the other. If you can get the 1,000 one to 10% this round, do that and it should help your score a little bit more.

Re: House loan question: Good credit with no income

Hopeforchange — Mon, 11 Feb 2013 17:35:15 GMT

Ok, maybe I should just pay the small one off and $600 to the larger one this month. Savings can wait.

My cards have very small amounts, never missed a payment and theyre 7to4 years old. Will it initially drop his score at first? He wants to start looking for a house this summer. Completely disagree, but I'm trying to see if it's even possible. Compromise if he gets his credit together.

Re: House loan question: Good credit with no income

Anonymous — Mon, 11 Feb 2013 18:27:13 GMT

If you are buying this summer, adding him as an authorized user would be a good thing. Usually a new account dings but when it is an authorized user account, all your history shows up on his credit report so it should help his AAOA as well as his overall utilization and should help his scores in the near term.

Re: House loan question: Good credit with no income

Anonymous — Mon, 11 Feb 2013 19:30:40 GMT

ONe comment - someone suggested pulling a Transunion score from this site -- the Transunion score they use here is pretty much useless. The equifax score is the same one most mortgage lenders use, as has been stated, but the Transunion score isnt' close. The walmart Transunion score is closer to what lenders might see...at least, that's been my experience for my wife and I.

Which of course highlights once again how ridiculous it is to put so much importance on credit reports and scores, when the reports, and the scores generated by them might not even be close to "accurate." If it's my responsibility to make sure my credit report is accurate, why do i have to pay to even see it other than one free report a year from each bureau? Dumb.

Re: House loan question: Good credit with no income

Anonymous — Mon, 11 Feb 2013 19:53:17 GMT

I think whether the TU score from this site is close or not close, depends on everyone's unique credit card profile. The TU score my lender pulled was 16 pts higher than the myfico TU score...so they were very similar.

Myfico uses TU98 and most lenders pull TU04. This is why the scores are different. They may be a little different or very different.

Re: House loan question: Good credit with no income

Anonymous — Mon, 11 Feb 2013 19:57:02 GMT

I should also mention that foofighter is absolutely correct regarding the Equifax score from this site. The EQ fico my lender pulled matched exactly with the EQ fico that this site provided.

Re: House loan question: Good credit with no income

Anonymous — Mon, 11 Feb 2013 20:09:12 GMT

I wouldn't call a 16 point spread "similar", especially when we're talking about possibly relying on that score as a mid score for FHA purposes. My wife's three lender scores were 614-639-657. The 657 was the lender's transunion score, while we got a 636 from this site on the same day. Her transunion score has gone down to 628 on this site, essentially because of a new car lease that occurred in November, but hadn't reported by the time we looked at scores in December. I have no idea how the lender Transunion score was impacted, but I would have to assume that particular model is a little more forgiving than the model here since her score was so much higher. We are assuming that's still her high score, even if it's gone down 10-15 points. In addition, her 614 is now up to 629.

But of course ,there's no way for us to know what her experian score looks like, and i've already mentioned the transunion portion of the equation...so we're left to wonder until the lender pulls another set of scores.

Re: House loan question: Good credit with no income

Anonymous — Mon, 11 Feb 2013 20:24:14 GMT

Yes. I see what your saying. The differences can be troublesome when you are hovering around 640. Myfico TU98 was 702 and the TU04 the lender pulled was 718. To me, they are similar considering the TU score provided by Credit Sesame is 649, which is a huge difference! Those FAKO guys are nuts! LOL