Marriage and Prior Debt??

[Anonymous]

I live in NJ and have 2 considerable student loans, I defaulted on one personal student loan years ago but still make monthly payments on it. I recently got married and my husband has spotless credit and a very high score, I've managed to clean up my debt quite a bit and raise my score but still have that one default on my record.  We are looking to purchase our first home together and my question is will my prior defaulted loan affect my husband in any way?  Like I mentioned I still pay this loan on a monthly basis due to an arrangement with the lender, if we purchage the home together can the lender go after the house because my name is on it or should my husband be the only name on the property?

[Anonymous]

Well, not necessarily. Worst case scenario, hubby could apply alone and your debt wont be included int he decision since NJ isnt a community property state (caveat: since lenders are a bit more apprehensive now, they actually might include your debt when figuring DTI. You would have to ask a broker in your area to be sure).

That said, do you know what your reports look like? Or what your FICO's are? Do you have any current accounts reporting (like revolving, auto, etc)?

[Anonymous]

My Fico scores are Trans:643 Eq: 642 (which I raised from a 580 by paying a good chunck of stuff off)  - I have auto loan good standing ( had 60 day late payment 2 yrs ago) , moms house cosigner: good standing ( which she pays I do not contribute to the payments), 1 school loan: good standing, secured cc $200 limit: good standing pay in full every month before reported to cb's, 1 judgement paid off 1 yr ago; and the bane of my existance the defaulted personal school loan, pays as agreed. My Vantage scores are higher Trans:773 Eq: 743 not sure which lenders look at in m y area. My payment history has been rocky but I have done everything in my power to pay everything off on time in the last year. My DTI is without including my moms house is 20% including my moms is high 65% - including my husband income (which he has 0 debt: DTI with my moms house is 28% without it's 8%

[ShanetheMortgageMan]

Lenders use your FICO scores, which yours are still OK to qualify for a loan, but if you say your husbands credit is excellent then you would have more options if he were to be able to qualify on his own.  I see you are trying to figure out your DTI but it's really just better to lay out your income & debt payments rather than trying to figure out your DTI because since it can be complicated to figure out no one really knows if you are figuring it out correctly or not.  DTI always includes the new mortgage payment and excludes the current rental payment (if renting) which most people never realize to figure in.

If you want to know if your husband can potentially qualify by himself then read Do I qualify for a mortgage? Info that is needed - you may want to break down yours & his so people can determine if you going on the mortgage would help out at all.

[Anonymous]

My husband does qualify on his own, has a high 800 score with 0 debt just paid off his car and makes approx. 93K a yr (qualifies for 400K on his own). We are actually scheduled for the inspection tomorrow and our attorney has adviced us that we shouldn't go for the loan until that is done, we have been pre qualified jointly for 600K... I make 68K a year and have those aforementioned issues, since I am a co-signer on my mom's home mortagege which is in great standing (never had a late payment) I wasn't sure if I should include her mortgage payment in my calculations for DTI?  This particular house is 315K we are putting down 20% and have finished the attorney review - My other question is should we go for a HELC when we apply for the mortgage? There is some reno that we would like to do and would like to get it out of the way before moving in, the house has been appraised at 350K - Like I mentioned for the last year I have been working on improving my score and credit and I guess I'm just overly concerned that my credit might be an issue. If my husband does get the mortgage on his own does his single salary affect getting an HELC (approx. 100K)?

[ShanetheMortgageMan]

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@Anonymous wrote:

since I am a co-signer on my mom's home mortagege which is in great standing (never had a late payment) I wasn't sure if I should include her mortgage payment in my calculations for DTI?  This particular house is 315K we are putting down 20% and have finished the attorney review - My other question is should we go for a HELC when we apply for the mortgage? There is some reno that we would like to do and would like to get it out of the way before moving in, the house has been appraised at 350K - Like I mentioned for the last year I have been working on improving my score and credit and I guess I'm just overly concerned that my credit might be an issue. If my husband does get the mortgage on his own does his single salary affect getting an HELC (approx. 100K)?

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The co-signed mortgage can be excluded from your DTI if it can be proven your mom makes the payments from an account that isn't in your name.  I don't think you'll get a HELOC over 80% of the home's value with your credit scores, most are looking for excellent (720+) credit scores for HELOC's to higher CLTV's (over 80%).  You can only only use income to qualify for a HELOC from a person who is applying for the HELOC.  You may want to look at just putting less money down and using that money for the renovations instead.