Financing in 91101>Question Details

Brian Tran, Home Buyer in Los Angeles, CA

Does applying for a loan jointly with another person who has no credit history help or hurt getting approved?

Asked by Brian Tran, Los Angeles, CA Mon Jun 4, 2012

My spouse has limited credit history due to having lived most of her life outside the US. Is it better to apply for a loan individually or does it help to add another one in who'd also be responsible in paying back the loan?

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It depends. If you need more income to qualify and your wife has income with a 2 year job history, it could help. As long as the borrower has 3 credit scores, we do not need the co-borrower to have credit scores.
1 vote Thank Flag Link Mon Jun 4, 2012
Hello Brian,

If your wife has no credit history putting her on the loan will not help you.

If you have stronge enough credit and meet the income requirements you should get the loan in your name only. This will ensure you get the best prevailing rate and terms.

Even though your wife will not be on the loan she can still be on title for the property.

Best of Luck to You.

Kawain Payne, Realtor
1 vote Thank Flag Link Mon Jun 4, 2012
Hi Brian - If you have gotten credit cards with her name on them but the account are in YOUR name, they are not building HER credit. Something as simple as a Macy's card in just her name could get things rolling and help her build credit. I don't know what kind of account your credit line is on, so I can't address that question. If you have not spoken to a loan officer, I highly recommend that as your best place to get the correct answers for your situation. Please let me know if you would like referrals.
1 vote Thank Flag Link Mon Jun 4, 2012
It depends on the kind of credit that your spouse currently has. She must have some amount of credit for the lender to base her ability to re-pay debt.
It also depends on your credit, income stability and the amount of down payment. We have a 'Pay Advantage' program with lender paid mortgage insurance which may work for your situation. I am real estate and loan broker and I can help you navigate through the scenario.
1 vote Thank Flag Link Mon Jun 4, 2012
That's a toss up and depends upon how much you make individually. Your spouse may not qualify...and if she does, her lesser credit score may raise your interest rate.

If you can qualify for what you want individually, I would say, qualify by yourself. If however you need her income to help qualify, see what her credit score is and go from there. Your mortgage lender should be able to advise you as to which is more advantageous for you.
1 vote Thank Flag Link Mon Jun 4, 2012
Hi Brian,


This is a valid question and one I have encountered on several occasions. First, as others have suggested, this is a situation best answered by a knowledgeable loan officer. That being said, I had some clients who moved to the United States from Europe. They arrived with no credit history but they did have jobs and cash for the down payment. The lender suggested they get a few credit cards, use them, and pay them off in full each month. In a few short months they had established enough credit history, and they had been working at their jobs long enough, to obtain a mortgage. I hope this helps. If you would like further assistance, I would be happy to help.

My best,
Jan Emamian
John Aaroe Group
(626)487-3678
jan@dreamhomelink.com
http://www.dreamhomelink.com
1 vote Thank Flag Link Mon Jun 4, 2012
This is definitely a question for you loan officer. That said, it is difficult for people with little to no credit history in the U.S. to obtain financing. I had a similar situation with a couple where the wife had great credit and the husband had no credit at all. In order to qualify for a higher loan amount, they wanted to be able to use the husband's income. He got a department store card and started using it immediately (and paying off the whole amount each month). Within a couple of months, he was able to show enough credit that his income was used to qualify them. Perhaps this would work for you as well. If you qualify for enough loan with your spouse's income, then it is not necessary to include her in the loan. You can still add her name to the property title later.
1 vote Thank Flag Link Mon Jun 4, 2012
It will only hurt you if you cannot qualify on your own, try it with her at first, the lender will tell you if you qualify alone. I work with an amazing team if you are interested in seeking this further and have also got people qualified who were recently here from living outside the U.S.

best of luck,

Gina.

Gina M. Labellarti
Realtor- Coldwell Banker Dynasty TC
9228 Las Tunas Drive, Temple City, CA. 91780
(626) 215-4462 Cell
(626) 287-9043 Fax
GLabellarti@gmail.com
License # 01509425
1 vote Thank Flag Link Mon Jun 4, 2012
Great Question, Brian! Generally, better to do the loan individually BUT I will defer to my trusted lenders who are the experts and can look at your specific situation in a Pre-Approval. Please contact me if I can be of any assistance.

Ron Takeuchi
1 vote Thank Flag Link Mon Jun 4, 2012
If you can qualify on your own, do so. Less potential headaches than adding a non-occupant co-borrower.

Hope this helps!

jdeblanco@kinecta.org
0 votes Thank Flag Link Wed Jun 6, 2012
Does applying for a loan jointly with another person who has no credit history help or hurt getting approved?

Do not ruin your chances to buy a home; we all feel the need to help our families, however, there are times we have to think logically and do what is best for us. Yes, your chances will be limited by having someone with no credit history on your loan.
You may still speak to different financial professionals to feel you are doing the right option, though; you will end up paying for your sentimentality. When you have to go to the process of buying a home, you need good information. Good luck on your search to buy a home.
Gris Torres
Gris.joesellca@gmail.com
0 votes Thank Flag Link Tue Jun 5, 2012
We have joint accounts together but she just never took out any credit cards. I have them and I add her for an extra card. That join account does have a credit line so that means something for her as well right?
0 votes Thank Flag Link Mon Jun 4, 2012
Yes, the joint accounts will reflect on your spouses credit report. We would need to verify how the accounts are reporting to her credit report. If the accounts show 'Joint' then they will contribute to her score and give weight for the loan approval. If the account report as 'Authorize User' then they will contribute to her score however the report will need to be reviewed for the loan approval.
Flag Mon Jun 4, 2012
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