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FHA and Non Borrowing spouse debt

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Established Member

FHA and Non Borrowing spouse debt

I have a question for you guys.

In a community state. What is considered from a non borrowing spouse credit? Charge offs, collections? I have tried to read through the boards and can't quite figure it out. My husband and i intend to go the FHA route and i will be the borrower. His credit is not the best as he has several charge offs and collections. Trying to figure out if that will be a problem.

 

Thanks

Message 1 of 18
17 REPLIES 17
Contributor

Re: FHA and Non Borrowing spouse debt

I am in a community property state (WA). I am purchasing a home and will be the only borrowed. My spouse is in school and doesn't have very good credit. I was told that her credit will not be a factor since I am the only person on the loan. I sure hope that really is the case because my file is currently in UW. It was even pre-underwritten and they never asked questions about her credit other than her student loans which I co-signed for her. Good luck!

Message 2 of 18
Established Member

Re: FHA and Non Borrowing spouse debt

Thank you thegrapelady, that is good to hear. Are you going the FHA route? Please continue to update us with your progress and good luck! I am quite anxious about starting this process and I am trying to understand as much as I can before hand.
Message 3 of 18
Contributor

Re: FHA and Non Borrowing spouse debt

Yes, we are going FHA. We almost went conventional but ended up going FHA because my score was just a few points off. My only advice is be as prepared as possible, and pick a mortgage broker/banker you know is good or recommended. Feel free to message me if you have any questions about the process we went through. Good luck!

Message 4 of 18
Contributor

Re: FHA and Non Borrowing spouse debt

Update: A terrible update! Despite my loan officer and processor all reassuring me that my spouse's debt/student loans did not matter, the UW came back with approval with conditions which required my spouse's student loan information, which I did NOT co-sign for. My loan officer and the processor are absolutely shocked by this and say they have never had it happen. I have no idea what will happen. I am pretty livid at the moment. I'll update with what I find out.

Message 5 of 18
Valued Contributor

Re: FHA and Non Borrowing spouse debt


@thegrapelady wrote:

Update: A terrible update! Despite my loan officer and processor all reassuring me that my spouse's debt/student loans did not matter, the UW came back with approval with conditions which required my spouse's student loan information, which I did NOT co-sign for. My loan officer and the processor are absolutely shocked by this and say they have never had it happen. I have no idea what will happen. I am pretty livid at the moment. I'll update with what I find out.


See if your loan can be flipped to conventional. Only the government loans require spousal debt to be factored in community property states.

Mortgage Loan Officer licensed in CA & AZ


Message 6 of 18
Contributor

Re: FHA and Non Borrowing spouse debt

Thanks dpeezy! We initially were going to do conventional, but they said my mid credit score needed to be 700, unfortunately it was 680. We are putting 10% down.

Message 7 of 18
Moderator Emerita

Re: FHA and Non Borrowing spouse debt


@thegrapelady wrote:

Thanks dpeezy! We initially were going to do conventional, but they said my mid credit score needed to be 700, unfortunately it was 680. We are putting 10% down.


^^that is a lender overlay

Message 8 of 18
Contributor

Re: FHA and Non Borrowing spouse debt

Ugh. Thanks. They seem to think the UW might make an exception and approve me because these loans were obtained before we were married. They say they are making a good case. I have no idea what to think anymore. The UW is in house, but still, I am not even sure this is can be a possibility.

Message 9 of 18
Valued Contributor

Re: FHA and Non Borrowing spouse debt


@thegrapelady wrote:

Ugh. Thanks. They seem to think the UW might make an exception and approve me because these loans were obtained before we were married. They say they are making a good case. I have no idea what to think anymore. The UW is in house, but still, I am not even sure this is can be a possibility.


I highly doubt this will fly. If your lender can't get you a conventional loan at 680, I would have backup lenders/options ready.

Mortgage Loan Officer licensed in CA & AZ


Message 10 of 18