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Collections and home buying.

Superk88
Contributor

Collections and home buying.

So were wanting to buy a house together soon but don't know if it's possible.

 

My wife is former military and now a stay at home mom. She has had two homes in her name using a va loan.

She has current house in her name which is a mobile home.

Her car 29k

and a NFCU credit card which I am a authorized user on. Limit is 25k but we literally only use it for gas and pay it off.

 

 

I have several account gone through collections that I have paid off.

 

3 that are now in collections which we are working on to negotiate to pay off.

 

My score is 580...hers is 750.

 

She has 0 income...I make 80k.

 

 

Will my collections have to go before we buy...could she buy and use my income since were married?

Message 1 of 7
6 REPLIES 6
ldkcivilservant
Frequent Contributor

Re: Collections and home buying.

If you're not going to be on the note, your income can't be used - since you will not be legally responsible for repayment.

NFCU Platinum $50k | Amex Delta Platinum $25k | Elan Financial $19.7k | Chase Freedom Unlimited $16k | Bank Americard $16k | Discover IT $13K | NFCU Flagship Rewards $10k | GS AppleCard $5.5k | Citi Simplicity $3k
Message 2 of 7
ShanetheMortgageMan
Super Contributor

Re: Collections and home buying.

As has been mentioned, to use your income you'll need to be on the new mortgage.  There are still lenders who will go down to a 580 score, especially for VA mortgages, but the interest rates get really up there.  For the collections that are still owing I'd recommend you look into doing a pay-for-delete.  To further increase your scores you should also check out the section called Rebuilding Your Credit, if your wife has other credit cards then getting added as an authorized user on those other cards will be one of the quickest ways to improve your scores.

Helping people with mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 3 of 7
Superk88
Contributor

Re: Collections and home buying.

Is it possible for us both to be on the mortgage even though I have collections...or Will those have to be paid off first.

Message 4 of 7
ShanetheMortgageMan
Super Contributor

Re: Collections and home buying.

Yes, it's possible to go on a mortgage when you have owing collections.  Assuming you are buying a primary residence collections will rarely be required to be paid off.  The more important questions about these collections are how much are each of them, are they medical or non-medical, and when did they get placed for collection (date on the credit report)?

 

When you are qualifying for a mortgage, especially FHA and VA (which your wife may still have sufficient entitlement for), and your credit ain't so hot, then a big step in getting approved is having clean credit history for the past 12 months - meaning no new late payments, charge-offs, collections, judgements or tax liens (BK's, foreclosures, short sales need much more time since the event).  So if your collections occurred over 12 months ago then likely they'd be found to be acceptable to an underwriter, but your entire credit profile (everything on your credit report) is taken into consideration.

Helping people with mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 5 of 7
Superk88
Contributor

Re: Collections and home buying.

Oh ok.

 

So while were preparing it's bes just to keep stuff up to date...reduce debt while we prepare to purchase.

 

If the collections come up for negotiations we will pay them off.

 

Most were due to job loss

Message 6 of 7
ShanetheMortgageMan
Super Contributor

Re: Collections and home buying.


@Superk88 wrote:

So while were preparing it's bes just to keep stuff up to date...reduce debt while we prepare to purchase.

Yes, that's a good plan.

Helping people with mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 7 of 7
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