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My wife has the credit!! And I have the income


Curiosity
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Just a quick question,

My wife has a decent credit score about 680 and my credit score is pretty poor around 550. My question is would we get approved for a loan for a home with her as the primary and me as a co-signer just for income purposes? Any help would be appreciated 

 

best regards

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10 hours ago, Curiosity said:

Just a quick question,

My wife has a decent credit score about 680 and my credit score is pretty poor around 550. My question is would we get approved for a loan for a home with her as the primary and me as a co-signer just for income purposes? Any help would be appreciated 

 

best regards

welcome to CB!

 

for a mortgage credit and income go hand-in-hand. Are you looking at real mortgage FICO scores? Your scores may be very different than the ones you mention. What reasons does FICO give for why her and your scores are not higher?

 

 

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On 7/15/2022 at 6:59 AM, Curiosity said:

Just a quick question,

My wife has a decent credit score about 680 and my credit score is pretty poor around 550. My question is would we get approved for a loan for a home with her as the primary and me as a co-signer just for income purposes? Any help would be appreciated 

 

best regards

 

If the app relies upon your income to qualify for the mortgage, your FICO is going to factor (and the loan will price off the lower of your two FICO's).

 

I won't sweat to this, but one work around may be to start writing a check to your wife for your "share" of your current rent.  This might substantiate an arrangement under which she can count your reasonable contribution toward the mortgage and maintenance expenses on your new house as "income", boosting her gross that used for mortgage qualification.

 

I've seen cases where such "rental" income is considered when between unrelated parties.  I'm making a presumption that it's a potential inclusion between spouses when a mortgage is taken on only one person's credit.'

 

(Hoping others here will give me a reality check!)

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On 7/15/2022 at 3:59 AM, Curiosity said:

Just a quick question,

My wife has a decent credit score about 680 and my credit score is pretty poor around 550. My question is would we get approved for a loan for a home with her as the primary and me as a co-signer just for income purposes? Any help would be appreciated 

 

best regards


There are certain loan programs, under the "Non-QM" umbrella, that will take the credit score from the higher wage earner to qualify.  So if that would be your wife then her 680 would be used for eligibility and qualifying purposes.  Think of it as a sub-prime loan, if you remember those from ~15 years ago, so it has higher rates than your traditional Fannie/Freddie mortgage but it allows certain flexibilities but require you to be better qualified in some areas (namely in the down payment category).

 

Still, with a 550 score you would also be eligible for an FHA loan with a minimum 10% down and VA loans don't have a minimum score (if you or the Mrs. are a Veteran). 

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On 7/18/2022 at 9:48 AM, hdporter said:

I won't sweat to this, but one work around may be to start writing a check to your wife for your "share" of your current rent.  This might substantiate an arrangement under which she can count your reasonable contribution toward the mortgage and maintenance expenses on your new house as "income", boosting her gross that used for mortgage qualification.

 

I've seen cases where such "rental" income is considered when between unrelated parties.  I'm making a presumption that it's a potential inclusion between spouses when a mortgage is taken on only one person's credit.'

 

There is something called "boarder income" which FHA, Freddie Mac and Fannie Mae's guidelines are below.  FHA allows it with a 2-year history of reporting it on tax returns, but Fannie & Freddie only use it with live-in aides for disabled individuals.

 

Boarders of the Subject Property (TOTAL)

(a) Definition

Boarder refers to an individual renting space inside the Borrower’s Dwelling Unit.

(b) Standard

Rental Income from Boarders is only acceptable if the Borrower has a two year history of receiving income from Boarders that is shown on the tax return and the Borrower is currently receiving Boarder income.

(c) Required Documentation

The Mortgagee must obtain two years of the Borrower’s tax returns evidencing income from Boarders and the current lease. For purchase transactions, the Mortgagee must obtain a copy of the executed written agreement documenting their intent to continue boarding with the Borrower.

(d) Calculation of Effective Income

The Mortgagee must calculate the Effective Income by using the lesser of the two year average or the current lease.

 

 

The following chart contains requirements related to rental income from a Borrower’s 1-unit Primary Residence:

1-unit Primary Residence rental income eligibility requirements
Eligibility Rental income generated from the Borrower’s 1-unit Primary Residence, including rental income from an ADU may be used to qualify a Borrower with a disability provided the rental income is from a live-in aide. Typically, a live-in aide will receive room and board payments through Medicaid waiver funds from which rental payments are made to the Borrower.
Documentation Evidence that the Borrower has received stable rental income from a live-in aide for the most recent 12 months
Qualification The rental income may be considered in an amount up to 30% of the total stable monthly income that is used to qualify the Borrower for the Mortgage

Boarder Income

Income from boarders in the borrower’s principal residence or second home is not considered acceptable stable income with the exception of the following:

  • When a borrower with disabilities receives rental income from a live-in personal assistant, whether or not that individual is a relative of the borrower, the rental payments can be considered as acceptable stable income in an amount up to 30% of the total gross income that is used to qualify the borrower for the mortgage loan. Personal assistants typically are paid by Medicaid Waiver funds and include room and board, from which rental payments are made to the borrower.

  • The HomeReady mortgage eligibility requirements include an additional exception. See Chapter B5-6, HomeReady Mortgage.

The following table provides verification requirements for income from boarders.

Verification of Income from Boarders
  Obtain documentation of the boarder’s history of shared residency (such as a copy of a driver’s license, bills, bank statements, or W-2 forms) that shows the boarder’s address as being the same as the borrower’s address.
  Obtain documentation of the boarder’s rental payments for the most recent 12 months.
 
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