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community property state (wa) and FHA mortgage and wife and I are separated

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community property state (wa) and FHA mortgage and wife and I are separated

My wife and I separated about a year ago and we have a young child.  My wife and son live with her parents. I have already closed all joint accounts. The 3 she had in her name only are all 90-150 days late.  Since she does not work she just quit paying on her credit cards  3-4 months ago and thats when her creditors started calling me.  I can't take a chance and have any negatives on my reports so I contacted consumer credit and set up a very helpful repayment plan that will keep her creditors content until she decides to start working again and I am making the payment each month.  Since we had a bankrupcy 4 years ago I have had zero negatives and can't let anything ruin what I have worked so hard to get back. My wife can't  possibly obtain any more credit at this point and she really does not even care about her ruined credit rating.   I understand the risk involved  waiting 2 more years or so to do a divorce.  I have spent 10 years with my wife and when we divorce she will lose her very good health insurance.  She is my son's mother and I do want the best for them both and I don't know how she will be able to continue to see her doctor every month and pay for the 2 prescriptions she needs very badly.  When the time is right I will proceed with the divorce.

 

I wanted to explain my circumstances so folks can understand why I am looking for a way to purchase a home while still married in a community property state.

The super low home prices and interest rates may never come again in my lifetime.  I would be a first time home buyer.  While doing some reading on the FHA  website I found something very interesting and hope someone here can tell that I am reading it right.  I am willing to put off buying a home for another year or two until  a divorce but this sounds like it might be doable while still married.  I will paste it next

 

What is a 'Non-Purchasing Spouse?'

First-time home buyers who want an FHA mortgage will learn about a variety of requirements which must be met to qualify for an FHA home loan. Some are set by the financial institution, some by FHA rules, and some are required by state law.

State laws governing FHA loan application procedures may vary greatly depending on where you live. Did you know in some states a non-purchasing spouse may still have to sign FHA loan paperwork in order for you to qualify for an FHA loan? The spouse may also have to go through a credit check even though they aren't co-signing or co-borrowing.

This is usually true when state law requires it when the applicant is trying to get an FHA loan on a first mortgage. Fortunately, the non-purchasing spouse’s signature is required only to acknowledge in writing that the spouse has no claim on the property. The signature also indicates the spouse is not a borrower and not required to sign the loan contract.

In addition to the signature requirement, in some cases the spouse’s debts must be considered in what FHA home loan paperwork describes as the borrower’s “qualifying ratios”. This information is used to determine the borrower's debt-to-income ratio. You'll find this common in states with “community property” laws where each spouse is entitled and liable for half of all property held in common in the marriage. Community property states have laws making each partner liable for a portion of the other’s debts.

When the non-purchasing spouse must submit to a credit check FHA loan rules dictate that bad credit reports on the non-purchasing spouse can’t be used to deny an FHA mortgage to the borrower, but the credit check is required nevertheless.
 

What do you think?  I understand to get legal help and I do plan on that.  I am just window shopping on scenerios at this point and I know a conventional lender would not touch my situation but FHA maybe???????



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Senior Contributor

Re: community property state (wa) and FHA mortgage and wife and I are separated

they will pull both of your credit scores and use all of your debts, but as long as she is not on the loan, she will not be counted as far as credit goes.  If your income can handle both of your debts and still meet all DTI requirements you should be fine.

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New Member

Re: community property state (wa) and FHA mortgage and wife and I are separated

Thank you very much Mickie



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Re: community property state (wa) and FHA mortgage and wife and I are separated

I have searched all over the FHA website looking for interest rates.  Will their program work similiar to others as in offering very low rates for first time home buyers?  Will the interest rate depend on DTI??



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New Visitor

Re: community property state (wa) and FHA mortgage and wife and I are separated

Live in Texas,

 

I am separated from my spouse and is currently seeking to purchase a home. FHA rules require non-borrowing spouse come to closure to sign papers. What about Conventional loans?

 

 

Message 5 of 9
Valued Member

Re: community property state (wa) and FHA mortgage and wife and I are separated

I am in NC and recently locked in a rate of 4.625% on a 30 year fixed. Don't know if the rates are different for different states. And my DTI is pretty high considering that I could not count my part-time income because I haven't had the job for 2 years.


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Regular Contributor

Re: community property state (wa) and FHA mortgage and wife and I are separated

horror stories likes these make me glad that I am nt or never will get married!

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Community Leader
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Re: community property state (wa) and FHA mortgage and wife and I are separated


@Smoothoperator wrote:

Live in Texas,

 

I am separated from my spouse and is currently seeking to purchase a home. FHA rules require non-borrowing spouse come to closure to sign papers. What about Conventional loans?


I believe that is a state requirement, as I've helped married couples buy in Texas with conventional financing and the non-borrowing spouse has attended the closing and signed documents (although they were also on title, so that is a difference between your and their situation).  I found some guideance on this amongst our own guidelines:

 

If only one spouse is on title to property being mortgaged, the following applies:

 

(i) If the state is a community property state (property is owned in common by husbandand wife), then both husband and wife must sign documents (mortgage, rescission and TIL).

(ii) If the state retains dower or curtesy rights (rights in estate of husband/wife), both husband and wife must execute documents (mortgage, rescission and TIL).

(iii) If the state is a common law jurisdiction (what’s her’s is her’s, what’s his is his), both parties do not need to sign documents. However, many states have additional requirements for property that is homestead (owner-occupied).

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New Visitor

Re: community property state (wa) and FHA mortgage and wife and I are separated

Hi,

I am in nc and recently locked in a rate of 4.25% on a 20 year fixed. Don't know if the rates are different for different states. And my dti is pretty high considering, that I could not count my part-time income...

Sandyy
Message 9 of 9
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