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Can my bad credit affect our chances for a good rate even if my spouse's credit is excellent?

My spouse and I are looking to purchase our first property and we are debating whether or not I should be included on the loan. His credit score is 780 and mine is 650. Combined we're bringing in roughly 120K and able to put down 100K. I have a grand total of 39K in collections for a student loan and credit card. I have recently started paying it off and it will likely be completely paid off by spring next year but it is still listing as 'delinquent' on my credit report. I know it is a good idea to wait to buy until my credit is cleared up but we found our dream home within our price range!Will we be forced to include both our names on the loan as we are married?If we include both of our names will it affect our chances for a better interest rate dramatically?Will I still be able to be listed on the property deed even if I'm not listed on the loan? by yvbeau_963_819 from Honolulu, Hawaii. Mar 25th 2013 Reply


Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

You didn't state what the purchase price is, so I don't know if $100,000 is a large down payment of a small on. I would agree with Peter that it may make more sense to put the minimum down and use the rest to settle up with your creditors. With less than 20% down, your low score will cause the pricing to take a significant hit. However, if you are not on the loan, then your income will not be used in calculating debt servicing, and that could have hit to your pricing , or even to your approval. The best thing for you to do would be to connect with a local Mortgage Professional and have them work through the options for you. You can find a qualified Mortgage Professional at the National Association of Mortgage Professionals at: www.namb.org. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Mar 25th 2013
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Peter Savino (855411LEND)
#101 ranked lender in New Jersey - 332 contributions

Bank use the lowest mid score of everyone that is on the loan application, but collection account are a problem. . With all your collection accounts i might suggest you do not go on the loan. Let your spouse speak to a loan officer that can figure out what the min. down payment needed for him to qualify on the loan by himself and you use the rest of the money to clear up your collections. This allows you to get out of debt and use your income to help pay the mortgage as well allows you to buy the dream home. You can go on the deed either way. If I can help you www. HOMEMORTGAGEXPERT.com Peter Savino

Mar 25th 2013
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Linda Wintersteen (Linda123)
#62 ranked lender in Arizona - 1,256 contributions

first, is hawaii a community property, community debt state? if your student loans are deliquent, that will not work for FHA OR VA govt loans.. It would be best to just have your spouse qualify, without you, you can be on the title and not on the loan, or i do have sources for private money, temporay loans, to get your house ,and then get your credit cleaned up.. linda yourloanpartneforlife@live.com

Mar 25th 2013
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Janine Bodway (Janine)
#25 ranked lender in Hawaii - 9 contributions

Yes, if joint application, you will have an increased rate due to a pricing adjustment on conventional loans due to the lower Fico score. The score used will be the lowest MID score of all borrowers. It is called Risk based pricing. Hawaii is NOT a community property state and you may be married and only apply for a loan in one name. However keep in mind you will also qualify off of that single income. The only liabilities used will be the ones that are under that borrower's name. Outstanding Collections are also difficult to work with in this balance range. It may be in your best interest to work on an individual application at this time until you are able to repair your credit over the months. Let's see if we can qualify your spouse alone for the home you are looking to buy so you can receive a letter of Prequal to make an offer should they qualify. I am in Hawaii and I would be very happy to assist you today. Janine Bodway 808-345-3091 jbodway@acceptancecapital.com. I have multiple loan programs available to target your specific needs with expanded ratios available.

Mar 25th 2013
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Andrew Alfonso (CashCow)
#43 ranked lender in Florida - 271 contributions

If you are bread winner in the family - short answer is YES. Andrew

Mar 26th 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

We would need more info to help you. What is the Purchase price? Does you spouse qualify on just his income?Call us or email us at 201-962-3555 or Team@BestMortgageOption.com for ano cost no obligation analysis of your situation.Ask for Michelle or Benny We will find the Best Mortgage Option to suit your needs!You can check us out at www.BestMortgageOption.com

Mar 26th 2013
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,960 contributions

Yes... Bad credit is always an issue... Someone with good credit can not be ussed to offset someone with bad credit. Also, lenders rate everything off the lowest middle score. So if your score is low, you may not be able to even be on the loan.

Mar 26th 2013
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