Auto refi - subprime...Help!

[dubcee33]

So here's the scoop...I'm getting my ducks in a row to get a mortgage this time next year. Initially, I was going to apply jointly with my wife so that our DTI ratio would work out for a house $185-195k. BUT her credit is such that it will be pretty much impossible to get a good rate. I anticipate we could POSSIBLY get her score to 620 (not good enough)

So, alternatively I could qualify by myself on my income alone, but I have 2 cars on my reports that mess up my DTI ratio. I would need get both cars off my credit reports to make everything work out. The 1st car is a joint auto loan with my father, who co-signed for me a couple years ago when my credit was in the dump. I'm sure he would refi to put it only in his name. (I have an awesome dad). 1 car down 1 to go.

Here's the booger...the 2nd car is joint with me and my wife (capital One)....my wife's EQ is 598..TU 550 with 8-10 collections, mostly medical...Can anyone point me in the right direction for sub prime auto refi? My wife will need to get it only in her name.

[Dustink]

Have you checked out the rebuilding section to try to get her score up?

If you bank with a local CU maybe they would help?

[dubcee33]

She has a high credit utilization, and paying down would definitely help the most...but it would be a crap shoot as to whether that plus account aging would make her scores high enough...we could probably meet the minimum for mortgage approval, but I want to fully take advantage of low mortgage rates. Maybe we can get her score high enough so that the auto refi wont be such a hassle...Thanks for the input. I will definitely check into some local CUs.

[Dustink]

She needs to get her utilization down at least a month before trying to refi. Her score will improve a lot with low utilization.

[webhopper]

---

@dubcee33 wrote:

So here's the scoop...I'm getting my ducks in a row to get a mortgage this time next year. Initially, I was going to apply jointly with my wife so that our DTI ratio would work out for a house $185-195k. BUT her credit is such that it will be pretty much impossible to get a good rate. I anticipate we could POSSIBLY get her score to 620 (not good enough)

So, alternatively I could qualify by myself on my income alone, but I have 2 cars on my reports that mess up my DTI ratio. I would need get both cars off my credit reports to make everything work out. The 1st car is a joint auto loan with my father, who co-signed for me a couple years ago when my credit was in the dump. I'm sure he would refi to put it only in his name. (I have an awesome dad). 1 car down 1 to go.

Here's the booger...the 2nd car is joint with me and my wife (capital One)....my wife's EQ is 598..TU 550 with 8-10 collections, mostly medical...Can anyone point me in the right direction for sub prime auto refi? My wife will need to get it only in her name.

---

Hi there, welcome to the MyFico forums!

One word of caution regarding the automobile refinance for mortgage purposes:

Even if you refinance the note into your father's name, you will still need to declare it during your mortgage application, or run the risk of committing what's known as mortgage fraud. What you may be able to do, is see if your dad is willing to pledge a secured loan against a CD or other financial intrument that can then be used to completely pay off the existing automobile note.  With the way that underwriters look at installment obligations, the payment against a secured loan would not count against DTI, since it is secured by liquid assets.

That's my suggestion, and I very much wish you luck.  

Also, might I suggest a visit to the Rebuilding Forum to get ideas on addressing your wife's prior collection accounts?  You may be able to address enough of the negative issues to qualify for a USDA or FHA mortgage using both of your scores. 

Best of luck to you in your journey!

[sccredit]

A word of caution: when we bought our house (in my name only) the lender ran my wife's credit and took into account all debt and debt payments on her credit report.

[Dustink]

---

@webhopper wrote:

---

@dubcee33 wrote:

So here's the scoop...I'm getting my ducks in a row to get a mortgage this time next year. Initially, I was going to apply jointly with my wife so that our DTI ratio would work out for a house $185-195k. BUT her credit is such that it will be pretty much impossible to get a good rate. I anticipate we could POSSIBLY get her score to 620 (not good enough)

So, alternatively I could qualify by myself on my income alone, but I have 2 cars on my reports that mess up my DTI ratio. I would need get both cars off my credit reports to make everything work out. The 1st car is a joint auto loan with my father, who co-signed for me a couple years ago when my credit was in the dump. I'm sure he would refi to put it only in his name. (I have an awesome dad). 1 car down 1 to go.

Here's the booger...the 2nd car is joint with me and my wife (capital One)....my wife's EQ is 598..TU 550 with 8-10 collections, mostly medical...Can anyone point me in the right direction for sub prime auto refi? My wife will need to get it only in her name.

---

Hi there, welcome to the MyFico forums!

One word of caution regarding the automobile refinance for mortgage purposes:

Even if you refinance the note into your father's name, you will still need to declare it during your mortgage application, or run the risk of committing what's known as mortgage fraud. What you may be able to do, is see if your dad is willing to pledge a secured loan against a CD or other financial intrument that can then be used to completely pay off the existing automobile note.  With the way that underwriters look at installment obligations, the payment against a secured loan would not count against DTI, since it is secured by liquid assets.

That's my suggestion, and I very much wish you luck.  

Also, might I suggest a visit to the Rebuilding Forum to get ideas on addressing your wife's prior collection accounts?  You may be able to address enough of the negative issues to qualify for a USDA or FHA mortgage using both of your scores. 

Best of luck to you in your journey!

---

Can't it just be viewed as his dad buying him a car and letting him drive it?

[dubcee33]

Thanks for the input everone...As far as the car where my father is on the loan, it's set up really weird. It's more like the car is loan is in my father's name, but they report me as a co-borrower. My credit scores were low 500 and tons of collections and no credit cards, so basically the loan (which is at 3% might I add) is in my father's name, and as a "favor" to help me get positive history, they added me after the fact...Also, since he works at the post office and the loan was thru their Credit union, the payment are deducted directly out of his pay check...weird huh? I just though i'd share that weird set up. And this demostrates that some of these bankers have more latitude at smaller credit unions. Where bigger corporation type banks are more black & white.

Anywho, I would have my father refinance pretty soon, so it'd be about a year before the mortgage even came into play. So it would be stretch for lenders to say the car was refi'd for mortgage purposes.

[Dustink]

Can you get the cars paid off in that time frame?

[dubcee33]

I could pay off one, but that would take a chunk out of my down payment....This would be the most sound option, but I just like to explore any and all avenues and weigh the pros and cons of each before finally deciding. It's going to take some discipline to be patient because I would be moving to an area that would cut my hour and 20 minute commute down to 30 minutes.  lol...plus I really dont want to re-new my lease again.