How to Apply for a Mortgage with Bad Credit and a Spouse - The Bills.com Blog

Is it possible for a homemaker wife, no income, to apply for a home mortgage by herself but use the income from her husband? The reason for this arrangement would be to take advantage of the wife's good credit and exclude the husband's bad credit.

That's a good question... but the bad news is that it is very unlikely that this would be successful in the current lending environment. Lenders won't let you match the 'income' from your husband and the 'credit' from you. What they will do is to take both of you as joint applicants... but if he is the wage earner his bad credit will harm you. The way people did this in the past was by literally fabricating their income with stated income loans (where you would say that you make your husband's income... or even more!) They are frequently called 'liar's loans' but they aren't too well embraced in this lending environment for obvious reasons.

I am buying a house and I have an EXCELLENT credit. My wife has BAD CREDIT (annoying phone calls on a daily basis). If I (only I and not add her to the loan) apply for a home loan and become a home owner will those credit cards chase me for my wife's bad credit? Will they take our house away because of it? Thanks

This really depends on whether you reside in a community property state. If you do, then the home will definitely be considered as an asset that benefits the "community" and therefore your wife's creditors may try to collect from you based on it. That being said, creditor recourses vary from state to state, and it is not easy fro them to take your home away, no credit card company can do that. What they will get is a lien on your home, which means that if you ever sell it, they will have rights to recover their money at that point. Even that can only happen after they file a case in court and are successful in getting a judgment. You should try and enroll your wife into a debt settlement program. Try this company: www.freedomdebtrelief.com (1-800-544-7211), they will give you a free consultation on your wife's options.

My FICO rating is 672, my wife's rating is 762. We are similar in salary and based on the mortgage amount we need, we would have a very good DTI ratio. Is there any "legal" way to just have my wife on the loan, thouh she wouldn't qualify by herself unless some of my income was included? We have 1 other variable, the house has a "in-law suite" and my mother will pay a monthly amount. Could that amount be used towards my wife's income?

You could certainly use the in-law suite as rental income (you'll likely have to have a rental agreement in place to prove this) and many lenders will let you take your higher FICO score. Depending on lenders, your DTI could more than compensate for your credit score. In this market, however, most loans that are getting done are conforming or FHA, so look into those programs. Check out: https://www.bills.com/homeloan/mortgage_refinance/ to see if you qualify.

I am refiancing my house and I was really annoyed I am not getting the best rate. I have a middle score of 727. (Which makes little sence given the black magic the FICO uses, but that is another story). I need a 740 to get the best rate. My wife has a middle score of 747; however, since my credit is lower, my score would be used. My question is, is this typical?

Because of the current mortgage scenario all lenders are being extememly cautious in the way they give out loans. Although not a common practice, when considering joint applicants, lenders may consider the lower of the two scores. But, this may be lender specific as well. You will need to get competing scores from different lenders and see if they are following the same method in you credit assessment. You can use Bills.com to get free quotes from up to 4 lenders. The more lenders you speak with, the more informed you will be about the whole process.

So, if you're married but trying to exclude your spouse from the mortgage application totally, do you check off married, seperated or single on the application? If you check single do they look into that? I'm in CA

Be truthful on your application, lying on the application can be considered fraud.

I recently got divorced (Feb 2009). I have been a stay at home mom (making no income) since before we purchased a home (my ex husband and I). We live in seperated homes in California (renting) and we own a home on Texas, that we are unable to sell. Is it possible to take my name off the mortagage in Texs? Or do I have to be resposible as well if we have to foreclose? I just want to save my credit.

The only way to take your name off of the mortgage is to refinance the home only in your ex-husbands name. If you did not want anything to do with this home, you should have sorted the matter during your divorce proceeding.

I am planning on getting married in approximately 6 months, and my soon to be husband has horrible credit due to a recent car repossession. If I'd like to buy a house after we get married (I have good income and credit)is it still possible to exclude him from the loan in the current economic climate? Or are lenders always going to look at both scores because we're married? I've been told various things due to the mortgage meltdown. Thank you!

You have every right to exclude him from the mortgage, but remember that income is a big factor when it comes to qualifying for a mortgage and is the reason why most couples apply for one jointly. If you qualify for the mortgage that you need without your husband's help, then there is nothing to stop you from doing so.

I'm thinking about refinancing my mortgage. Right now the mortgage and title of the house is in my name only. I purchased the house in 2005 before my husband and I got married. I started to fill out a refinancing app and it's asking for copies of tax returns, which we file jointly. He has a discharged bankruptcy, which is why the house is in my name only. Can I be the only one on the mortgage, even if we have to show our jointly filed tax return? Thank you!

Yes, you can still get the mortgage in only your name. Keep in mind that income is a very important factor when it comes to mortgages, but looks like you had sufficient income to qualify for the first one, so I don't see why you should not be able to qualify for the refinance on your own as well. Make sure that you clarify this point with your future lenders, and get a confirmation from them beforehand, that your husband's credit will not be checked.

I know this question has been asked in different forms, so I apologize for some repetition. My issue is as follows: I am married and my wife is the one with the good credit score, mine has some old debt back from school and hence the score is really bad. I've just started negotiations with the debtors so that I can have much of the interest waived, as I can pay the principle credit upfront. My income is higher than hers, but her income is good enough to get a decent mortgage. But we know we can afford a much better place if we combined our income. Would I run the risk of getting rejected if I include myself in the application? If I do get rejected, can I go back and re-apply in only my wife's name?

You will not know unless you apply with several lenders and see what the out come is, if the single income is not sufficient, they will let you know that it is better to apply jointly. In that case, you might want to wait till you resolve all the delinquencies or else you might end up with a higher interest rate. You can get matched with up to 4 lenders by using this form: https://www.bills.com/homeloan/purchase/

My daughter and her new husband want to buy a home, but his credit has been damaged due to a home he tried to short sell, the mortgage company messed up and the sale was lost so now the mortgage is in foreclosure. Her name is not on that mortgage. Her DTI alone would not qualify for a mortgage by herself. Is it possible for her to use her husband's income without putting him on the mortgage? Together they have a good DTI.

That will not be possible, if the husbands income needs to be considered, it will have to be a joint application, and both their credit profiles will be taken into consideration.

My wife and I are planning on buying a home. I have excellent credit (780+) and good income. My wife doesn't have a credit history (recently relocated), and therefore, has no score. If we apply together (so she can be on the title as well as to consider her income), will her "no credit score" affect us - pull down my score and no longer qualify for the best rates?

You have a couple of options, but really you should discuss your opportunities with your loan office and a few lenders to make sure that you get the best deal. Generally - if you apply together then they will look at your combined income, combined debt to income, and BOTH of your credit scores. If she doesn't have income, or you don't need her income to qualify, then you could apply without her (but decide on your own if you want her on title), and then not be impacted. Net-net: be sure to openly discuss your options with your lender. Good luck! Bill

My wife has deteriorating credit due to our current home being in default and in the process of short sale/foreclosure. We could afford the payments, but can't rent it for close to the payment and now have two small kids in a 1 BD/1 Bath condo. My credit is good (750) and my income is about 2.5 times hers and sufficient to cover a mortgage loan. How do I fill out an application if I want to qualify using just my credit? When they ask whether I rent or own, what do I say? Technically, I don't own, because my wife bought this property before we were married (qualified on her own) and I am not on the mortgage or the deed of trust. Thanks for any advice!

I think you are making the process a little more complicated than it is. Always, always, always be forthcoming and honest when completing a loan document. The key indicator mortgage companies look for in a borrower is the debt-to-income (DTI) ratio. Let's assume you rent the condo and it is cash-flow negative. Even with that bleeding, if your household DTI is at or less than 35% you should be fine for the mortgage you seek.

We live in Oregon and would like to buy a house in Washington. I am looking to get a home loan in only my name to take advantage of the first time homebuyer tax credit. The issue is that my husband currently owns (well, is paying the mortgages of) 3 houses already. My credit score is better than his, but he makes more money than I do. We have a pre-nup agreement stating what his before the marriage will remain his (including the 3 homes and all his debt) and what was mine, will remain mine. We have a joint checking account, but everything else is still separate. I saw that Washington is a community property state, does that mean they will need to consider my husband's income, debt, and homes? Or can I apply completely separate so they do not need to look at any of his financial info.? Thanks for your help and advice!

Community property law concerns the ownership of property acquired during marriage and its division upon divorce. A spouse applying for a loan in a community property state makes the same disclosures as a spouse in a non-community property state. If you remain as Oregon residents, the Washington property will be handled the same way in a divorce that a Oregon property would. However, if you plan to become a Washington resident, then you may be complicating the question. If becoming a Washington resident is your intention, I recommend you bring your pre-nup to a Washington attorney experienced in family law, and have him or her advise you as to your rights under Washington law. Generally speaking, legal pre-nup agreements trump state family law, but Washington may have different rules on this issue.

I am currently divorced.. Back in 2007 my husband at the time couldnt apply for a house loan so he asked me to so we could move into a bigger home we lived in one of his parents rentals.. Income wise I knew that the loan that I qualified for I would never be able to pay on my own. but with my husbands income we were more then fine.. So I qualify for the loan move in and two weeks later my husband tells me that he wanted me to get the house for the kids and I but he was having an affair and that he was not moving to the new home with us.. It was devastating. So mind you I tried everything to afford the house on my own but I have six kids he doesnt pay his support and is self employed so know way to garnish him. The house went into foreclosure. Even the judge felt bad about the story.. So anyway.. after the foreclosure the house sold quickly... How will that be on my credit... I am so afraid of what my future holds finanacially.

Credit scores are calculated using a proprietary formula. Therefore, it is impossible for anyone to say with certainty how much one event (such as a foreclosure) will increase or decrease your credit score. To learn more about how credit scores are calculated, see FICO Score Calculation. You did not ask about this subject, but I suggest you contact your divorce attorney regarding child support. Your ex-spouse being self-employed does not give him the right to ignore court-ordered child support. Your state may offer you various means to force your ex-spouse to stay current in his payments, including suspending state-issued licenses, including his driver's license, license to practice law, and so on. An attorney experienced in family law will assist you in collecting support from your ex-spouse.

i just went through a short sale in september (completely closed out and reflected as paid in full less than the full balance on credit report). Since then i have cleaned up my credit report and have had some negative items removed from my report thus the only negative is the short sale. my credit score just checked is 727 (only on 1 of the 3). is it possible to get another mortgage and if not when or could my wife get a mortgage (homemaker) and i co-sign for the income. she was left off the first mortgage (short sale) so there is nothing negative on her credit?

There are facts you did not include in your question that are highly relevant, including your income and job history. The only way for anyone to answer your question is for you to work with a broker and see what mortgages you qualify for. Download a Uniform Residential Loan Application, complete it, and start shopping. Get a mortgage quote from up to four pre-screened lenders from Bills.com.