For Home Buying Couples Who Have Good and Bad Credit Profiles

For Home Buying Couples Who Have Good and Bad Credit Profiles

This video discusses home loan scenarios involving spouses with different credit profiles. In other words, when one spouse has good credit and the other does not.

Scenario #1

In this scenario, the husband has a steady source of income and good credit, but the wife has poor credit.

Conventional Financing Rules
The best option for this situation is to take out the loan in the husband’s name. In this case, the wife would be listed as a non-borrowing spouse, so there is no need to pull her credit, and the loan will be based on the husband’s income and credit score. The wife will still be 50% owner of the property.

FHA Financing Rules
The rules for FHA financing are a little different than those of conventional financing. In this case, it is still the best option to do the loan in the husband’s name with the wife listed as a non-borrowing spouse. The loan will be based on his credit score, but the debts of both the husband and wife will be considered in the debt to income ratio. Judgments and collections for both parties will be considered and even though the loan will be based only on the husband’s credit, the wife’s credit will still need to be pulled. The wife will still own 50% of the property.

Scenario #2

In this scenario, the wife has a steady source of income and good credit, but the husband has poor credit.

Conventional Financing Rules
The best option for this situation is to take out the loan in the wife’s name. In this case, the husband would be listed as a non-borrowing spouse, so there is no need to pull his credit, and the loan will be based on the wife’s income and credit score. The husband will still be 50% owner of the property.

FHA Financing Rules
The rules for FHA financing are a little different than those of conventional financing. In this case, it is still the best option to do the loan in the wife’s name with the husband listed as a non-borrowing spouse. The loan will be based on her credit score, but the debts of both the husband and wife will be considered in the debt to income ratio. Judgments and collections for both parties will be considered and even though the loan will be based only on the wife’s credit, the husband’s credit will still need to be pulled. The husband will still own 50% of the property.

For more information about your loan options if you and your spouse have different credit profiles, contact Mike Durr, The Kingwood Mortgage Guy, at (281) 348-9899!

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