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Non-borrowing spouse questions -- and regarding TSP loan

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Senior Contributor

Non-borrowing spouse questions -- and regarding TSP loan

We're hoping to app in the early Spring (Feb-March time-frame) and because I have crappy credit, we're hoping to app hubby alone for the application. So, technically, he will be the only person on the mortgage note (not sure how the whole title thing works -- if I'm automatically not on it because I'm not on the mortgage).

So my question is whether or not DH can still go for the $7500 Tax Credit thing. We always do our taxes jointly and his AGI is roughly $70K (approximately $93,500/year, not including overtime and bonuses for patents). Because we do our taxes jointly will we have to pass on the tax credit?

And also, if it's just him on the mortgage, will the tax credit income guidelines set him at "single" ($95K income limit) or "family" ($150K limit)?

As for the TSP loan related question, we're planning to get a TSP (Federal Thrift Savings Account -- sort of like a 401(k)) residential loan for $18-20K (depending on how the markets fluctuate). TSP rules state that we can only borrow an amount for the DP and a few other costs (appraisal, origination fees, closing costs, etc, must be paid by US -- the loan won't cover them).

So my question is how would this be handled by our LO (hopefully Dallas, if he's still willing to put up with us)? I mean, he can't fudge the numbers to "give us" reserves using the TSP loan -- the TSP loan rules don't allow it. In fact, we have to provide the TSP account services with a signed contract stipulating the costs and DP.

And how would that work? Wouldn't we need PROOF that we have the $$ in our bank account before we actually get approved? Since the contract has to be signed FIRST, wouldn't we be taking a huge chance at getting approved?? How does all that work???

Also, if we have to put down earnest money, it would HAVE to come from the TSP loan. But we can't get that money until we have a signed contract.

Please, please, please forgive me for the stupid questions. We're getting closer and closer to taking the plunge and it seems that every time we feel like it's TIME, something else comes along that we just don't understand.

DH wants to app NOW, believing that the whole matter is so simple. I'm the one pushing to wait until his scores hit higher (supposed to hit low 700s by Feb), a late from April '08 (30 day on car note) gets older and we know more about what we're doing. :/

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*

Hubby's FICOs when we started: high 400s (June 2008)
Hubby's FICO NOW (04/06/09): TU: 679 EQ: 608 EX: ???
My FICOs: TU: 643, EQ: 606
Closed on new home: 1/20/2009 -- If we can do it, YOU can do it!!

Message 1 of 7
6 REPLIES 6
Senior Contributor

Re: Non-borrowing spouse questions -- and regarding TSP loan

Bump? Please?

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*

Hubby's FICOs when we started: high 400s (June 2008)
Hubby's FICO NOW (04/06/09): TU: 679 EQ: 608 EX: ???
My FICOs: TU: 643, EQ: 606
Closed on new home: 1/20/2009 -- If we can do it, YOU can do it!!

Message 2 of 7
Super Contributor

Re: Non-borrowing spouse questions -- and regarding TSP loan


@Wonderin wrote:
We're hoping to app in the early Spring (Feb-March time-frame) and because I have crappy credit, we're hoping to app hubby alone for the application. So, technically, he will be the only person on the mortgage note (not sure how the whole title thing works -- if I'm automatically not on it because I'm not on the mortgage). In Texas, you will be on title if married. I believe it is the same for all community property states.

So my question is whether or not DH can still go for the $7500 Tax Credit thing. We always do our taxes jointly and his AGI is roughly $70K (approximately $93,500/year, not including overtime and bonuses for patents). Because we do our taxes jointly will we have to pass on the tax credit? I am not sure. Maybe a CPA can answer. I haven't looked that deep into the credit paperwork.
 
And also, if it's just him on the mortgage, will the tax credit income guidelines set him at "single" ($95K income limit) or "family" ($150K limit)? I am willing to bet that it is family.... I would think they go off household income. I will look it up later, as I have a question about the program myself.

As for the TSP loan related question, we're planning to get a TSP (Federal Thrift Savings Account -- sort of like a 401(k)) residential loan for $18-20K (depending on how the markets fluctuate). TSP rules state that we can only borrow an amount for the DP and a few other costs (appraisal, origination fees, closing costs, etc, must be paid by US -- the loan won't cover them). 

So my question is how would this be handled by our LO (hopefully Dallas, if he's still willing to put up with us)? I mean, he can't fudge the numbers to "give us" reserves using the TSP loan -- the TSP loan rules don't allow it. In fact, we have to provide the TSP account services with a signed contract stipulating the costs and DP. When does the loan disburse? If before closing, then that amount will be on the application. FHA doesn't require reserves.

And how would that work? Wouldn't we need PROOF that we have the $$ in our bank account before we actually get approved? no. Since the contract has to be signed FIRST, wouldn't we be taking a huge chance at getting approved?? you would be approved, subject to the tsp loan. and you should have a financing contingency in the contract. no risk. How does all that work???

Also, if we have to put down earnest money, it would HAVE to come from the TSP loan. But we can't get that money until we have a signed contract. ok

Please, please, please forgive me for the stupid questions. We're getting closer and closer to taking the plunge and it seems that every time we feel like it's TIME, something else comes along that we just don't understand.

DH wants to app NOW, believing that the whole matter is so simple. I'm the one pushing to wait until his scores hit higher (supposed to hit low 700s by Feb), a late from April '08 (30 day on car note) gets older and we know more about what we're doing. :/

 

Retired Lender
Message 3 of 7
Super Contributor

Re: Non-borrowing spouse questions -- and regarding TSP loan

sorry.... the dumb forum took out all of my colored text

 

Retired Lender
Message 4 of 7
Senior Contributor

Re: Non-borrowing spouse questions -- and regarding TSP loan


@DallasLoanGuy wrote:

@Wonderin wrote:
We're hoping to app in the early Spring (Feb-March time-frame) and because I have crappy credit, we're hoping to app hubby alone for the application. So, technically, he will be the only person on the mortgage note (not sure how the whole title thing works -- if I'm automatically not on it because I'm not on the mortgage).
 
In Texas, you will be on title if married. I believe it is the same for all community property states.


We're in Florida ... it's not community property state (which DH delights in reminding me just to twist my tail). So would that mean that I can still be on the title? Would I want to?
 
Our marriage is really a happy one (despite my occasional rantings), so I'm not worried about a property dispute in divorce court. But I AM worried that some time down the road, my not being on the title might screw us? Don't know how all that works. :/
 
So my question is whether or not DH can still go for the $7500 Tax Credit thing. We always do our taxes jointly and his AGI is roughly $70K (approximately $93,500/year, not including overtime and bonuses for patents). Because we do our taxes jointly will we have to pass on the tax credit?
 
I am not sure. Maybe a CPA can answer. I haven't looked that deep into the credit paperwork.
 
Well, crud. I really don't want my crappy credit to screw us out of that. Even though I think it's not such a good idea to take a loan from the government, it'd be nice to know if it's an option. 
 
And also, if it's just him on the mortgage, will the tax credit income guidelines set him at "single" ($95K income limit) or "family" ($150K limit)?
 
I am willing to bet that it is family.... I would think they go off household income. I will look it up later, as I have a question about the program myself.


LOL, of course you do! It's the gubmint!! They never make sense, much less make things simple!
 
Sorry, I have issues with the gubmint -- comes from dealing with them professionally and personally (DH's employed by them) for the past 20 years. Nothing is EVER easy or makes sense!! :rollseyes:
 
As for the TSP loan related question, we're planning to get a TSP (Federal Thrift Savings Account -- sort of like a 401(k)) residential loan for $18-20K (depending on how the markets fluctuate). TSP rules state that we can only borrow an amount for the DP and a few other costs (appraisal, origination fees, closing costs, etc, must be paid by US -- the loan won't cover them). 

So my question is how would this be handled by our LO (hopefully Dallas, if he's still willing to put up with us)?
 
Hopefully, my questions and the situation with the TSP loan won't make us more trouble than we're worth!!
 
 
I mean, he can't fudge the numbers to "give us" reserves using the TSP loan -- the TSP loan rules don't allow it. In fact, we have to provide the TSP account services with a signed contract stipulating the costs and DP.
 
When does the loan disburse? If before closing, then that amount will be on the application. FHA doesn't require reserves.
 
We can get the money within 3 business days of providing them with a signed contract and application (they have to verify that we HAVE the money -- there's no chance of being denied otherwise -- we're talking about using $18-20K, but we do have more that we can access -- we'd just rather not if we don't HAVE to). 
 
But I thought that even though FHA doesn't require reserves, putting in numbers for reserves was one way we could make an otherwise weak file stronger?
 
I don't really understand all of this. Can you tell?
 
BTW, I REALLY wasn't suggesting that you do anything illegal or unethical when I said "fudge the numbers" -- that was just my hillbilly way of paraphrasing what you've said about adding dollar figures here, lowering them there to find the approval "sweet spot."
 
And how would that work? Wouldn't we need PROOF that we have the $$ in our bank account before we actually get approved? no. Since the contract has to be signed FIRST, wouldn't we be taking a huge chance at getting approved??
 
you would be approved, subject to the tsp loan. and you should have a financing contingency in the contract. no risk. 


Ah. Gotcha. Is a "financial contingency" common? Or is that something that could make the seller nervous and leery of working with us?
 
Also, if we have to put down earnest money, it would HAVE to come from the TSP loan. But we can't get that money until we have a signed contract.
 
ok
 
 
So that wouldn't be a deal-breaker?
 
Please, please, please forgive me for the stupid questions. We're getting closer and closer to taking the plunge and it seems that every time we feel like it's TIME, something else comes along that we just don't understand.

DH wants to app NOW, believing that the whole matter is so simple. I'm the one pushing to wait until his scores hit higher (supposed to hit low 700s by Feb), a late from April '08 (30 day on car note) gets older and we know more about what we're doing. :/

 



FWIW, I got your PM a while back and have been fighting with DH all that time over the "whens" ... like I said, we're seeing some nice houses in the price range we're interested in and he's getting antsy to say the least. While his mid-score is 642, I really want us to wait until his scores are higher (like I said, supposed to hit 700s around Jan/Feb) and decrease the likelihood of a 30 day in April dinging us -- and obviously, increase our chances of being approved via AU.

 

I've also been fighting him on it because if we wait until Feb, we could close around the date our lease is up -- otherwise, we not only have closing costs and such to deal with (and the refunded security deposit would be nice, too, at that time for moving expenses), but also a $1K "fine" for breaking our lease.

 

What do you think? Should we wait until his scores rise higher (lowering util by Jan, April 30 day aging more, etc) or should we grab for the gold ring now?

 

As always, thank you so much, Dallas!!! I really hope that I haven't scared you off with all this crap -- and my incessant nagging and whining!! o_O

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*

Hubby's FICOs when we started: high 400s (June 2008)
Hubby's FICO NOW (04/06/09): TU: 679 EQ: 608 EX: ???
My FICOs: TU: 643, EQ: 606
Closed on new home: 1/20/2009 -- If we can do it, YOU can do it!!

Message 5 of 7
Super Contributor

Re: Non-borrowing spouse questions -- and regarding TSP loan

The lender should be able to add you to title. If not, then he can deed 1/2 interest to you after closing. Just hve title company draw it up and you can sign right after closing.

 

it is an interest free loan. put it in this low stock market and watch it double in 2yrs.

 

 the tsp loan isnt any trouble, i have seen deals like this.

 

 playing with the numbers, we would just add the tsp monies to your checking account and run the file.

maybe putting down more than 3.5% would help. 5% maybe. sometimes that will offset reserves.

 

Retired Lender
Message 6 of 7
Super Contributor

Re: Non-borrowing spouse questions -- and regarding TSP loan

yes, finance contingency is common.

 

you dont have any other cash on hand for earnest deposit?

 

 

Retired Lender
Message 7 of 7
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