Home Buying in 60173>Question Details

Gabriela, Home Buyer in Illinois City, IL

FHA loan with a co-signer.

Asked by Gabriela, Illinois City, IL Tue Feb 26, 2013

My husband and I want to buy our first home but we tried to get pre-approved and didn't qualify because of our credits.My lowest credit is 570 and my husband lowest is 610,the other two credits are above 640.We have a time share about $5000 in collection and two medical bills for less than $1000 that will be paid off in the next two months.Other than that we are up to date with our payments on credit cards and our debt ratio is about 5 . Between the two of us we made $78 000 last year.I was wondering since we didn't get pre-approved if we could use one of my parents as a co-signer to get an FHA loan.Thank you!

Help the community by answering this question:


A co-signer typically only helps if you are having trouble qualifying on your income. It doesn't normally help with regards to lower credit scores.

Were you declined because your middle credit scores were only 640 or based off of the collections? If it was simply due to scores then check around because although a lot of lenders require all borrowers to have middle credit scores above 660, there are some out there that will still go down lower than that.

If you were declined by FHA's underwriting system then that is likely due to the timeshare and you will probably have to pay that off. An installment debt, especially housing related like a timeshare, is looked at much more seriously than a medical bill.

At any rate I would check around with a couple local reputable lenders and get a second opinion and some insight into exactly why you werent able to get preapproved.

Best of luck!
0 votes Thank Flag Link Tue Feb 26, 2013
I meant out debt ratio %35
0 votes Thank Flag Link Tue Feb 26, 2013
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