Financing in Fort Worth>Question Details

Marcus, Home Buyer in

I have good enough credit to get approved for an FHA loan. My wife was terrible credit. Can I get it done?

Asked by Marcus, Fri Aug 22, 2008

with only my name on the loan but have her on the title without her credit being pulled??

Help the community by answering this question:


Her credit will be pulled in Texas. And her debts will be added to the loan application for debt ratio calculations. But if you qualify for the loan yourself, her bad credit and scores will be ZERO part of the underwriting decision.
No worries!!

Now, if you need her income to qualify, then it can hurt.
However, you would be surprised at what can be approved thru FHA.
If her scores are over 620.... there will be no negative effect on the rates. If they are under, then risk based pricing will ad a little to the rate.
Many times I have seen a borrower who couldn't get approved alone, add a great credit co-borrower to the loan and get approved. So, she may not hurt you as much as you think.

1. Don't be afraid to apply.... it is free. If someone tries to charge an application fee, find a new loan officer.
2. Do NOT pay any collections as a condition of loan approval. FHA doesn't require that.... though, some lenders do. If bank 1 can get you approved by paying collections, bank 2 will definately get you approved WITHOUT paying them.
Judgments/tax liens are the exception to what doesn't have to be paid off.....

Good luck!!
3 votes Thank Flag Link Fri Aug 22, 2008
FHA requires both spouses to have their credit report pulled. The issue is that the other spouse may be delinquent on debt. Texas is a community property state, meaning her debts are yours. Despite what some people have said below, her credit report does matter, especially her debts.
Lenders that do not pull spouse credit for FHA are in violation of FHA regulations. The underwriter can choose to ignore some items for a variety of reasons, however. Conventional loans do not require it, but lenders generally pull both anyway, because it is sound lending practice.
The primary earner is key here. If she earns the majority of household income or if you cannot support the loan on your own income, you may have some issues to deal with. This does not mean it is impossible, just more difficult than other borrowers.
Please note that last year things were pretty easy going. Everybody has gotten religion now. Following the rules is important to appraisers, who give values to lend on, and to underwriters, who decide whether a loan is risky or not according to guidelines. Appraisers are not automatically giving a value that will support a loan, and neither are underwriters "making it work" when the rules are being bent.
The best course of action is to get pre-qualified with a lender. Then you will know what you're up against. If credit issues need to be addressed, then go fix them. If your in satisfactory shape, then go buy a house.
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1 vote Thank Flag Link Sun Aug 24, 2008
Hi Marcus, I am glad you asked that question, As long as you have the best credit and the most income then her credit and income will not hart as bad. If you need her income to make the loan then it will pull it down. In Texas you will need 620 to get loan, but if you have less you will have to pay discount points are a higher rate. This is a great question,make sure you both understand everything. Good luck in BUYING A Home. Need Help...
1 vote Thank Flag Link Sat Aug 23, 2008
I feel like a broken record, but once again must say "not in New York". That is for both Toni in CA, and TE in TX.
First of all, "all states" do not require you to have the wife on the loan and/or title. Also, it is not "FHA" who requires the wife's debts to be pulled, seeing as we don't have to do that in NY either.
The only caveat is that FHA will not allow 1 spouse on the loan, and 2 on title. Also, if a non-occupying co-borrower is on the loan, they have to be on title too.
I have numerous times left 1 spouse off if they have poor credit and I can qualify on 1 income alone. What you can't do is use the person with bad credit's income, and use the credit for the person without income.
0 votes Thank Flag Link Sat Oct 30, 2010
Hi Marcus,

As many others have told you, if you do not need her income to qualify for the loan then her credit is not an issue. If you do need her income to qualify for the loan, then you must get her credit repaired. Yes, it is true that FHA will overlook many derogatory items if her score is over 640, but if her credit is below 640 then you may need help repairing the credit.

We send hundreds of our clients to National Credit Solutions for help in repairing their credit reports and removing derogatory items. Call Greg Boswick at 1-888-WHY-FICO and get his advise. This is not a FREE service, but they are experts and it will be a good investment for you now and in the future.

Please feel free to call me or one of my team members with questions.
Best wishes,
0 votes Thank Flag Link Sat Oct 30, 2010
It doesn't matter what state you live in. If you are married and have filed a tax return together, your wife;'s credit will be pulled. Her debt and credit rating WILL affect your ability to obain an FHA loan. It will be considered a "drain" on your income. Check out the new FHA lending guidelines. A 620 credit rating overall score with 3 1/2% down is minimum. ratios may vary depending on the history of payments, but if she has major disputes such as a judgement, or lates on her credit within the past 24 months, you are going to have to show a substantiated reason for those discrepancies. My advice is to speak with a direct lender and work on straightening up her credit with payoffs and a rapid rescore before you apply for an FHA. Don't be fooled by lenders that say they can push federal guidelines.
0 votes Thank Flag Link Tue Sep 14, 2010
The program you are looking for is an fha loan with a non-purchasing spouse. She is on title by the fact that we are in a community property state in Texas. If you are married and she lives in the house with you she will have an interest in the property. Please let me know if you have any more questions.

Terry Smith
Web Reference:
0 votes Thank Flag Link Fri Nov 7, 2008
It all Depends, I would talk to a loan officer. In Texas if you are married you might have a problem I suggest you email a lender try
Texas Capital Lender, He is a Bank and can do more then most brokers
0 votes Thank Flag Link Wed Sep 17, 2008
Everything mentioned below is correct. However our bank will allow you to go down to a 580 credit score with no adjustment to rate. Iway loan is a mortgage banker and specializes in FHA and conforming loans. Please call me if you are interested in discussing your scenario.

(713) 821 9738
TOLL FREE 1-877-886-5626 x 138
AUSTIN BUSINESS JOURNAL TOP 25 LENDER 2002, 2003, 2004, 2005
0 votes Thank Flag Link Mon Aug 25, 2008
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