Combined credit??

[RW771]

Hi all,

I'm not sure if this is the correct board for this question but since I'm working on rebuilding my credit I figured this would be the best place.

My question is how does marriage affect your credit? My credit is healing and slowly working its way up 1 point at a time, painstakingly slow lol. My fiancee's credit is bad and part of the reason we're having to wait to get married is due to the fact that we would be unable to buy a house (according to my LO) if we got married prior to getting pre-approved (in his divorce back in 2007 his ex-wife was court ordered to re-finance the house in her name and never did, so he still shows to own the house, thus tying up his DTI ratio). I've been told your credit and your spouses credit become "combined" once you get married, so I worry that once I finally get my head above water, just what will happen once we are married.

[GregB]

You would start by looking at the Judgement for Dissolution and looking for the details on disposition of the house. Did the court order a change of title? If so, was it done? Was there a court order to change the mortgage? If so, was it done? If he was removed from the title and is still on the mortgage he could be consider to be in debt for the mortgage balance and doesn't have the house asset either. If she didn't pay, he would have to pay.

If that is true then any new mortgage lender may make demands in order for him to get a another mortgage. He will probably have to show her cancelled checks for the mortgage payments for several years and a tracing of the source of those funds. They will want to be very sure that he is not paying any part of the mortgage. His ex will probably need to show that there is equity in that house and that she has virtually no negatives on her credit, at least for several years. They will probably demand a full credit check on his ex just like she was buying a house. They will want substantial proof that she is in no danger of missing a payment. If he can't provide that then they may want him to qualify based upon paying both payments, his existing mortgage and the new one.

If there is a court order for her to refinance, then the easiest thing to do might be to go back to court and demand that be done or the house sold. I am skeptical that there is a court order requiring the house to be refinanced.

You should consider that a divorce in 2007 is very recent.

[RW771]

Thanks for your reply.

I'm not sure just what he's going to do with this situation. I've tried not to get involved with it, but his attorney has told him that he would have to go back to court and the judge would have to order the bank to remove him off of the loan unless she re-fi's on her own *shrug*. This is why I'm getting pre-qualified on my own (although it would be nice for income purposes to be able to include his income as well).

A divorce in 2007 is somewhat recent, however it has been almost 5 years and she was the one caught being unfaithful and filed for the divorce. My fiancee and I have known each other for over 10 years now and I was the one who got away (before he met his now ex-wife) lol.

[GregB]

A judge can't order the bank to remove him from the loan. The loan was a contract made between the lender and two people. One of those people can't be removed without a new contract being written, which really only happens with a new loan.

A lot of people just assume that the person who keeps the house will "have to refinance" but it usually isn't correct. I have seen a lot of people assume that the Judgement of Dissolution says that but it usually isn't there. In my experience that condition can't be forced upon the spouse keeping the family home. Different courts and different states might allow that.

I wasn't clear on my comment on "recent". I mostly meant that a new lender will look at 5 years of payments on the old loan and not think of that as being a long time.

I certainly wish I had married the one that got away instead of the nightmare I married.

[bruiseviolet]

here is my advice- take it from my parent's situation.

Divorced after 25+ years of marriage.  House was in his my dads name.  Dad ended up behind bars.  Mom couldn't afford the payments, so tried to refinance- bank said, you aren't on mortgage can't do anything-  she tried to get my dad to get off the papers so she could do it- he was being spiteful and wouldn't do it-   (she was even going to short sell it-) we just spent last weekend moving my mom out because house was forclosed on- and now dad is throwing a stink because she didn't try and sell it and it's wrecked his credit.  LOL  *rolling eyes*

The bad thing is how traumatic this has been for my mother- her house was her safe haven.  Really hard on all of us really.  =(