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Possible homebuyer...question about 1 income..
Currently my husband is unemployed (since December) and I am able to cover all our expenses on my salary and I have enough for a downpayment saved as well as enough extra to cover several months of expenses if something else were to happen. We were planning on buying a home soon and according to mortgage calculators I can afford a home larger than our rental house on just my salary and the mortgage+PMI+taxes+insurance would still be less than what we currently pay for rent. The problem is that I have some credit issues on my report from 6.5 years ago when I was a single parent (they will drop off in October) so my credit score is only 577. My husband's score is much higher but he does not currently have an income so I'm not sure how that plays into a mortgage. Will his score even be considered with him not having an income? We are just really needing a bigger place now because my teenage nephew moved in with us unexpectedly last summer and it's just way to tight for comfort on the weekends my stepkids are here.
We could wait until DH has an income again (not sure when that will be) or wait for my old credit issues to drop off and my score to increase, but I don't really want to wait if we don't have to. Thanks.
Re: Possible homebuyer...question about 1 income..
With that credit score, you wouldn't qualify for any financing that I know of. The cutoff of any lenders I deal with is 620 for a conventional GMAC loan. There was one lender I dealt with that allowed for a lower score... and I can NOT remember the name, but will check @ work tomorrow.
If your husband does get a job, he will need to be back on the job for six months.
We didn't have a problem buying when I was unemployed, but we had better credit scores than that.
I would try to start the process now and see what lenders say, and if you get turned down for pre-qualification/approval (I forget which one mean something) try again in Oct.
But I would think that just b/c the black mark falls off that the score won't go up instantly.
I agree with PP. We are possibly going to purchase a home now but we are running pre-approvals with a few lenders to find out what the big picture looks like and get an accurate estimate of what we can truly afford in terms of purchase price + closing costs (I had no idea closing costs were that much, so I'm glad we did a pre-approval and not just a pre-qualification). When you do a pre-approval, you are not saying you will go with that lender -- you're basically just getting a quote and a pre-approval letter you can take with you in case you do find a property you truly want to buy and can afford.
Basically, it never hurts to ask. Run a pre-approval, sit down and talk to the mortgage banker about the results, and then at that time you can ask the "what if" questions. GL!
I'm a SAHM, and we had no trouble qualifying for a mortgage on our current home with only one income. And that was without selling the last one (we chose to rent it out until the market here comes back a bit and makes selling more attractive to us). So it can be done, but you have to have all your ducks in a row. Our credit scores are both over 740 and we have squeaky clean credit. Your DH being unemployed isn't itself a deterrent if you're otherwise qualified; it's your credit score and other issues that are likely to pose any problems and your DH couldn't qualify on his own without income. As others have said, it never hurts to ask. The worst a lender can say is no, and then you wait.
Even if you can get approved for a mortgage, with your low credit score, it will be much more expensive. You will have a higher interest rate and end up paying more for your home than you otherwise would, or should.
I would wait at least until they drop off.
Have you paid those collection accounts or settled up?
Why not find a larger place to rent in the meantime?
Our home is in my name only. While our approval was based on my credit score and income, they also looked at his, although it didn't "count." They still wanted his paystubs and everything.