co-borrower with bad credit

jbonafide · Joined: 07 Mar 2008 Posts: 2 1.89 Dollars($)

My fiance and I are looking at purchasing our first home together. My credit score is pretty good at a 755. I have been at my current employer for almost 2 years. Last year I grossed almost $50,000.

My fiance has a bad credit score of a 600. His credit is bad due to debt he and his ex wife accumulated and never paid. He has several accounts that went to collections for $400-$900 a piece. He is working on settling the collection claims and paying those delinquent accounts. He has 2 jobs. First employer he has been there for almost 3 years or so and the second employer is self-employeed (it is claimed on his 2007 taxes) which has only been 1 year employed. Last year he grossed about $56,000 where $6,000 went to child support (for the year).

Our financial commitments are (joint me and fiance for fiance's car) car loan for $370/month, $250/month student loan (joint for fiance with his ex wife which was for school loans consolidated together and both are making the payments), $350/month for a personal loan (me only), and I have a $250/month student loan (it is in my name) which my father pays every month.

What is the best solution for trying to get a mortgage? I would like him included on the mortgage for the extra income but his credit will hurt the interest rate. I don't know if just having me on the mortgage will get me approved for the amount I would need for the house we are looking at.

Are there other options with me as a primary and him a secondary? Thanks!

larry · Joined: 27 Jun 2007 Posts: 3245 460.30 Dollars($)

Hi jbonafide,

Welcome to the forum.

I think if you take the loan on your name only that will be better. and both of you can pay the loan amount together. Whenever you fiancé improve his credit you refinance the mortgage and add his name on the mortgage.

Best of luck,
Larry

jbonafide · Joined: 07 Mar 2008 Posts: 2 1.89 Dollars($)

thanks Larry! I am only concerned with whether or not I will be approved to do 100% financing if the loan is only in my name. The property we found and like so far is 300k before negotiations.

I read under the credit section of these boards about a co-signer only adding to your total income and that their credit isn't factored in. Is this true?

Jeanette · Posted: Sun Mar 09, 2008 8:50 am Post subject:

Welcome to the Forum,

Jbonafide,

Your husband credit score is really not bad but fair. His score will definately be put into consideration if you go conventional. The lender will take the lower of the two Beacon Score. Therefore, a co-borrower not only adds income but the score is relavant. When you go FHA then they are not score driven so it would not be of great significance. Try to go through an FHA lender and both you and your husband can get a great loan based on the historical payments and if you have judgements or collections. You said your husband has judgements and collections and he is trying to pay them off. When he pay them off that would put you in a better position for you and husband get loan together. FHA is driven by your liquid assets and if you clear current judgements or collections...then they will offer you a great rate..... Please consider.

Thanks and Good Luck.

Jean Smith, LO
Representative
NCI Mortgage
Cell-757-338-1889
office-888-773-3746

Guest 0.10 Dollars($)

I have very bad credit but my husband has great credit. Will my credit score effect him in any way if he needs a loan for a car. My name would not be on the loan.

larry · Joined: 27 Jun 2007 Posts: 3245 460.30 Dollars($)

Hi Becky. Welcome to the forum.

If your husband is taking the car loan on his name only then your bad credit should not affect him to get approved. If you are also included on the car loan then only your bad credit would effect.

Best of luck.
Larry

enriko · Joined: 05 Mar 2008 Posts: 66 17.32 Dollars($)

Hi jbonafide,

well firstly i dont think that your fiances credit is that bad, 600 right?

Take the loan on your name and pay it together seems sensible.

Take care

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