i have okay credit (685) but we want a house that's 150,000-160,000. andhe has really bad credit(500's)...so i don't think i can get approved alone cause i only make 2900 a month and he makes about the same...so can i apply for the loan and somehow add his income with out using his name or credit?
2007-01-06 12:51:40 · 8 answers · asked by Cristal C 1 in Business & Finance ➔ Credit
it was a typo i take home $2400!!
2007-01-06 12:56:05 · update #1
well we've been together 6 years now and lived together for 2 years. the only reason we haven't gotten married was because we think that his credit will impede us from buying a home if we are married...is that even a realistic fear?
2007-01-06 13:04:18 · update #2
how much money should i save for down, closing costs and cash reserve? if you think i need all of the above
2007-01-06 13:06:57 · update #3
his credit is bad because we don't use it anymore...ever since an error appeared on his credit, we just started using mine...my credit is good because of him...he paid everything since i've been in school but i will now be graduating in may and teaching in the fall..
2007-01-06 13:14:52 · update #4
Just in case no one told you, it is a bad idea for non-married people to buy a house together. If the relationship falls apart then you've got a real mess. It takes two signatures to get the house and the mortgage and it takes two signatures to sell the house. If you go through a divorce, you can force the sale of the house; but if you're not married you cannot force the other party to sell or even to make the payments. You have to work with the generosity of a a jilted, and often bitter ex-lover to get the job done...good luck in that situation.
2007-01-06 12:59:28 · answer #1 · answered by KC 4 · 0⤊ 0⤋
Unfortunately no ... the only way for his income to be used in calculating the loan amount is if his credit score also comes into play. HOWEVER ... most lenders are VERY eager to make loans on homes for several reasons ... first ... unlike other types of debt, a house increases in value over time and it's unlikely that enough damage could be done to a house to decrease it's value (if you take care of it) plus if you default on the loan they foreclose and they get the house for free and you get zero money back ... SO ... for all those reasons banks are often willing to loan you money for a house that they wouldn't loan you on other debt.
At 150,000 a year your payment would be $875 a month (30 year loan ... but shoot for a 15 year loan or less if you can afford it) plus another few hundred for taxes and insurance. If you have a good credit score and are making $2900 a month you should have no problem getting a loan on your own for the house ... especially if you have money to put down on a down payment. If you can't put down at least 20% you'll be forced to pay PMI (private mortgage insurance) which will add about $500 a year (or $50 a month) to your payment until you hit that 20% mark.
Recommendation ... get the loan done BEFORE you get married ... with his lower credit, it'll be much harder to get a loan once your married AND you interest rate could be 1 - 2 % higher than the 5.75% rate I used to calculate the payments above.
Good Luck ... but ... you shouldn't have any problems.
Additional info:
Even at $2,400 you should be able to get a loan ... but ... it will be a little harder. And DEFINITELY it is a concern. His lower score will hurt you without question. Get the loan before your married.
2007-01-06 13:04:25 · answer #2 · answered by Informed1 4 · 0⤊ 0⤋
You can get a house before getting married, we did it one month prior although we only lived together after getting married. But your fiance's score is really low and you should probably work to boost that before applying for a loan - otherwise you will wast thousands of dollars. If you could use a piece of furniture, like a couch, have him finance it under his credit and pay it off early or on time. Have him pay down any credit cards he has. If he has two credit cards and can pay one off, he needs to keep them both open because available credit is part of the equation. If you apply for a mortgage with little or no down lenders like to see that you have some banking balances or retirement fund statements to show that you have some reserves. Besides that, you will need to come up with a few thousand of closing costs.
Also, remember that if you didn't use his credit, buying the house wouldn't count to help his credit in the future until the point you would refinance to include him.
Your credit does not have to be perfect to get a loan and buying a house is usually a fantastic investment. But if you plan for it and time it right you can help yourselves a lot. Good luck.
2007-01-07 03:35:03 · answer #3 · answered by PF32 2 · 0⤊ 0⤋
First I will agree with those who suggest not buying a house together before you are married. That said, the only way you can use his income when applying for the loan is if his name is on the loan. His credit will be checked if he is on the loan.
2007-01-06 13:13:48 · answer #4 · answered by STEVEN F 7 · 0⤊ 0⤋
Most subprime lender use 50% dti which means if you and you boyfriend have a combine income of 4800 a month, your total debt (mortgage payment, car payment, credit cards etc.) should not exceed 2400 a month.
Most prime lender's dti are 28/36 (up to 28% of income for house payment and up to 36% of income for total debt (including mortgage pymt).
2007-01-06 13:45:54 · answer #5 · answered by ig86 1 · 0⤊ 0⤋
I strongly suggest you to buy a house you can afford on your own (Try a $75,000-$80,000 used house) and leave your fiancé out of this.
I also suggest you to increase your credit score to above 700 before you try to get any home loans.
You can apply for a few Credit Cards for this purpose (Just don't use them)
2007-01-07 07:10:09 · answer #6 · answered by Anonymous · 0⤊ 1⤋
It depends on your Debt to Income Ratio... you might be able to get approved on your own. You should talk to a few Loan Officers...make sure you don't go with the first one you meet.
2007-01-06 12:54:02 · answer #7 · answered by fungaljoe 2 · 0⤊ 0⤋
Cristal,
you want real world answer or bankers answer?
real world Do NOT buy any house with him until you got five years of marriage and money counseling under your rings.
he needs to learn about money and actually manage it profitably.
you need to learn not to buy on emotion with out real money.
get a House Buying for Dummies read understand. visit daveramsey.com to learn what bankers pray you never ever learn about money. understand bankers can get any one into a mortgage with creative financing.
unfortunately most are out on the streets in five years. foreclosures are up near 70% over last five years.
2007-01-06 13:09:39 · answer #8 · answered by Anonymous · 1⤊ 1⤋