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Questions about buying with others and credit

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Questions about buying with others and credit

So I don't really come around this part of the forum much but it seems I'm going to start spending some time here too. 

I currently live with two roommates and we need a bigger place. They want to buy a house. The problem is... they don't have great credit. We are a year and a half away from our planned move date and I'm going to be scrambling to get their scores up. 

My question is... They want me to buy with them. I have decent enough credit to qualify but my $18K income obviously doesn't do much compared to their combined $90K. I also would kind of rather not have my DTI maxed out since it's unlikely I would ever make enough to be able to take the loan over myself. So if I can get their scores up enough for an FHA loan, is there any benefit to me being on the housing loan other than not being able to be removed from the house (which I'm not worried about)? It seems to me that the best course of action is to help them rehab their credit so they can buy a place and then just rent from them like I do at our current place. 

My other question is... if I can't get their scores high enough, what are the chances of us being able to get a loan off my credit (mid score at least 688) with their income? It doesn't seem like a very common situation where unrelated people want to get a house together (they're married, I'm a roommate of almost 4 years but we act like a family in many ways and people observing how we interact would actually think we were a family) so I'm not really sure what the process even looks like. 

As for rehabbing their credit, it shouldn't really be much work. I made them both AUs in two of my cards which enabled them to each get their own unsecured card from Capital One the next month. One of them just is building from zero and the other has student loans that are in default that I'm going to get on her to take care of. 

Sorry if my questions don't make sense, I'm not really sure how to even ask. Here are the facts - 3 people want to live together, 2 have decent incomes, 1 has decent credit. We are looking for an FHA loan. 



01/2019:
03/2020:

Closed: CareCredit $10K, B&H Payboo $7500
Hover over my cards to see my limits!
Goal cards: Cash+, Freedom.
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Re: Questions about buying with others and credit

You can’t use someone’s income and not their credit or visa-versa they will use the LOWEST middle score of all applicants and it’s all or nothing, next the benefit to you being on the mortgage is that you would have a 33.333 % stake in the house, meaning when you sell you get 1/3 the profit, but that presents a can of worms of 1 of you want to sell but not the other.
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Re: Questions about buying with others and credit


@Muffinman83 wrote:
You can’t use someone’s income and not their credit or visa-versa it’s all or nothing, next the benefit to you being on the mortgage is that you would have a 33.333 % stake in the house, meaning when you sell you get 1/3 the profit, but that presents a can of worms of 1 of you want to sell but not the other.

Right I know that everyone would be considered. I didn't phrase it right. Basically if I can't get their scores high enough, would it be possible for my credit to carry the loan even though my income can't or do I need to get them both up there?

 

Its honestly going to be a lot of hassle trying to get this together in a year and a half. Saving the 3.5% down payment alone is going to be a pain since I'm not allowed to save money (Medicaid long term care asset limits of $2K) but I have to convince her to rehab her student loans too if we are going to have a chance otherwise it's going to be myself and her husband that have to do the loan which will chop about $40K from the total income. 

I honestly don't want to be a homeowner. I have never desired to be a homeowner. But I don't want to have to find new roommates so I'm entertaining the idea for the sake of continued stability. I just unfortunately have very little knowledge of how the whole process works compared to the rest of my credit knowledge. 



01/2019:
03/2020:

Closed: CareCredit $10K, B&H Payboo $7500
Hover over my cards to see my limits!
Goal cards: Cash+, Freedom.
Message 3 of 3
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