Buying a home, but bad credit?

IPmama · January 2012

I have a horrible credit score from craziness with my ex husband and bad choices. My DH and I both make about the same salary, but he has a great credit score. Because of my horrible credit score and history I wouldn't qualify for a loan, but do they have to include me?

I am just curious if they have to include both of us? Or is that if only my income would be needed to get a better home? Or is there a way to add my income as his additional income?

Am I making sense?

Shell24 · January 2012

In the "good old days" (lol) you could do stated income, but it's doubtful that would be allowed now.

If your DH qualifies on his own, great. You would obviously be approved for more with the higher HHI, but with you on the loan you could either not be approved, or your interest rate would be through the roof. With rates around 4%, you wouldn't want to jeopardize that.

You should still be on title, even if you're not on the loan.

Desmond&MollyJones · January 2012

How bad is your credit score?

I know someone with a score of 620 who just got a loan with a 4.25% interest rate.

makinithappen · January 2012

You don't have to be included. however, if you want your income included, they will look at your credit. You need at least 620 for most loans.

It's either all or none-you're on the loan or not.

hereonceagain · January 2012

our buyers just got approved and the scores were in the 500's. they have good income but screwed up their credit. they did some special FHA loan for bad credit. I have no idea on their rate though. And their bad credit got them denied several times at first and delayed our closing by 3 months.

jacksjerseygirl · January 2012

- Do you KNOW that you have bad credit or you just assume?

- When was the last time you made a 'bad choice'? Bad choices don't impact you for a life time ... if you cleaned them up ... then your score will rise.

They do not have to include both of you but then you will only be approved for a loan based on your husband's income and qualifications. You won't be approved for a higher amount, even if you can afford it monthly when including your income.

You cannot add your income to his income - it simply will not be counted as a deciding factor in the loan amount because unless you are on the loan then they can't take a risk on that 'extra income'.

My suggestion is to make sure you know your credit score, make sure you have gone through the items on the report with a fine tooth comb (request any duplicate, outdated, or incorrect items be reviewed and removed) and FIX the items that you need to fix which means tracking down those that you owe money to and fixing the problem.

Before buying a home it should be you and your husband's first priority to make sure that you fix your past issues and repaying old debts so that you BOTH can move forward - it's in your best interest long term.

Good luck!

cheetah*run · January 2012

You may need to ask about the laws of your state. When we lived in a community property state, both incomes and credit scores had to be used, if married. When we moved to a non community property state, we could use one spouse's income and credit and simply add the other spouse to title.

nsfw · January 2012

jacksjerseygirl:
- Do you KNOW that you have bad credit or you just assume?

My suggestion is to make sure you know your credit score, make sure you have gone through the items on the report with a fine tooth comb (request any duplicate, outdated, or incorrect items be reviewed and removed) and FIX the items that you need to fix which means tracking down those that you owe money to and fixing the problem.

You can get your three credit reports each for free once a year at http://annualcreditreport.com. You have to pay for your FICO; it is usually about $10, $20 on myFico.com.

toothpastechica · January 2012

Our loan is in my FI's name, im a sudent so dont have an income anyways, and with student loans it would reduce how much they would lend to us, so we kept me off. My understand is that yes, you can be left off so that your credit doesnt reflect...however then your salery must be left off too, so it will change the amount of loan money you can get drastically (unless your Husband makes 20 million a year in which case you wouldnt need a loan) as it has to be supportable by only one income. Talk to banks and local lenders, we had an awesome morgage broker who gave us about 13 different options about ways we could do it because of our circumstances and we picked the one that we thought we could sustain the best based on FI's income alone.

Buying a home, but bad credit?

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