What credit Score is needed to be a Co-Borrower on a Mortgage?

Question

I was wondering what credit score is needed to go on a Mortgage loan with as a Co-Borrower. I heard it used to be at least a 500 but that was the old Mortgage world. In today's dried up market what FICO is needed.

And if that person earns more money than the Borrower does they're FICO has to be the high score used for the loan, or can they're score just be considered for the Income?

Thanks in Advance

Thanks for your Answers. Maybe I didn't word it right. The Borrower FICO is 622 but don't qualify with enough Income. So if they had a Co- Borrower what credit score is needed by the Co-Borrower for they're income to be considered to Increase the purchasing power of the Borrower.

Answer 1

Doesnt matter who's on the mortgage they use the lower credit score. Doesnt matter who makes more money either.

if you have 680 700 720...they will use your middle score 700
if your spouse has 650 620 680 they will use 650.
If you're both on the loan they will use the 650

Answer 2

It depends on the loan program, lender, etc. Typically on subprime mortgages the co-borrower needs at least a 500 FICO. With most prime loans they lender will take the lowest credit score...so a 500 won't work. Likewise, Prime lenders usually don't care who makes the most money. FHA loans aren't credit score driven so that may be an outlet, but even though FHA loans are credit score dependent that doesn't mean that you can get away with having horrible credit!

The mortgage world is too complicated to have one set of rules. For a question like this there are several answers and they all depend on circumstances that we couldn't guess at.

Answer 3

That's something that varies from lender to lender. I can tell you that 500 is an extremely poor credit score and will probably keep you from renting an apartment and buying a car, let alone qualifying for a mortgage. In today's market lenders are more cautious than ever, so a good credit score is even more important. FYI, a decent credit score is about 650, and over 700 and closer to 800 is ideal.

You're going to have to shop around for lenders and get the answers from them. Good luck.

Answer 4

Well the primary borrower will have his FICO score reviewed and in this case obviously since he needs a co-signer he doesn't qualify for income or FICO score. 500 is a very low score so I doubt that the bank would be happy with a co-signer with that low a score. You need close to 700 to get a good loan rate.

Answer 5

As you may or may not know it is very difficult to buy a house now for people with low credit scores (less than 700.) The stock markets are falling and companies are failing because they lent money to people who were not creditworthy at ridiculous rates they could not afford. So to be blunt you don't have a lot of opportunity now as it stands, but that's not to say there isn't hope. First let me say that for you it may be cheaper and more financially sound for you to rent until you either get a better credit score or the housing economy improves again (which can take years). Fixing your credit score though won't take as long so focus on that for now.

Hope this helps. 700 is at least what you should aim for!