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Need advice


Need advice

My boyfriend and I are looking to buy a fixer-upper back in Pennsylvania (we live in NYC now and pay astronomical rent!). He has a FICO Equifax credit score of 706, but was just laid off from his job. I have a FICO Equifax score of 628 and I make a base salary of $36,000 per year with around $10-15K commission per year.


I spoke to a Loan Officer yesterday about a fixer upper in the $79K range that we fell in love with. He told me that I wouldn't qualify for a FHA 203K rehab loan, and I would need to pay down some of my credit cards to boost my score. He told me that they take into the lowest score only so my boyfriend's high scredit didn't matter.


Here is my idea. My boyfriend goes to the bank and takes out a $5,000 loan. He gives me $3,000 to pay 

down most of my cards (I have about $4,000 in credit card and $15,000 in student installment loans). We will add the other $2,000 to the $3,000 we have saved for a down payment, making our down payment about $5,000. I will apply for the mortgage on my own (since I have the income and hopefully will have a decent score) and will hopefully be approved. The house only needs about $15,000 worth of work, so that would be a loan of around $80K if I can talk the guy down to $70K.
Once I receieve the $7,000 tax credit I will apply $5,000 of it to his loan.
What do you think?
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Established Contributor

Re: Need advice

You have to disclose if any portion of the down payment is borrowed.  I would recommend asking your loan officer about your plan before going through the effort and perhaps finding out it won't work.  What were your other two scores from the loan officer and what are the balances on your cards and the limits for each?  It's possible you can get the boost you need without completely paying them off..
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