mortgage options, joint or individual

[JL22]

My wife and I are in the process of purchasing our next home and we have a few mortgage options to consider.

 

The first is a joint mortgage in both of our names. 30 yr fixed at 3.875, 5% down payment. My lower credit (approx 650) is hurting our rate and PMI payment.

 

My wife has the ability to qualify on her own at a rate of 3.5%. Together with a lower PMI payment, the monthly payment difference is $144. The only catch is that her debt to income ratio is 51%. To qualify by herself the lender said she would need to at or below 44%. To get there, I could refinance 2 auto loans in my name only. This would require me to bring in about $2000 cash and would increase the monthly car payments by a total of about $25-30. So, the net monthly savings would be about $120.

 

What should we do? A $2000 one time payment vs $120 per month over 30 years sounds like a no brainer, but time is also factor. To refinance the cars, get the proper documentation to the lender and then everything approved will take some time.

 

 

All this for being late 33 days on a BOA credit card.

 

Thanks in advance.

 

- Jason

[luckydriver]

i'm assuming FHA PMI is higher than conventional but just wanted to toss that out there in case i was wrong.

[JL22]

FHA isn't an option. Home sale price is 350K and FHA lending limit in my County is 280K. But yes, if we were under the FHA limit, FHA PMI would be higher, i think.