Mortgage Application

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akim1220
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Mortgage Application

Postby akim1220 » Wed Mar 13, 2013 12:53 pm

My wife and I are planning to purchase our first home this summer when our lease ends in July. She is currently a student and will be graduating this spring/summer. She does not have a job lined up yet so should we add her to the loan applications or should I just put my name? How much will this effect our loan rates and plan?

Ranger
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Re: Mortgage Application

Postby Ranger » Thu Mar 14, 2013 5:09 am

I don't include my wife on mortgage apps because she's self employed and the income documentation requirements are insane.

Insofar as credit worthiness is concerned, i assume your spouse brings nothing to the income side of the table. Even if she had a job lined up after graduation, underwriters might not count the job because of her short tenure. On the other side of the ledger, any school related debt will be captured on the app as household debt.

Please check with your specific State, but i believe its generally if not universally true that even if you're the only one on the mortgage, the house can still be co-owned by the two of you (I.e. both names on title). So, I'm having trouble identifying any benefit of including your wife as a co-applicant. Maybe a local expert will come along and tell us differently.

Strummin365
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Re: Mortgage Application

Postby Strummin365 » Thu Mar 14, 2013 11:45 am

Ok I don't want to hijack anyone's thread, but this is very similar to a question I wanted to ask so I figured I wouldn't start a new one.

My fiance has a credit score of close to 800. I've had some collections in my past and my credit score is much lower. We are getting married before we buy a house. Can she only put her name on the mortgage applications and leave me out of it if we are legally married? I was under the assumption that once you are married you have to apply as a couple.

Thanks!

TCstr8
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Re: Mortgage Application

Postby TCstr8 » Thu Mar 14, 2013 12:45 pm

You can always apply for a mortgage seperately. However, the State that the property is in will factor into whether or not the non applicant spouse's debts have to be counted against the applying spouse.

http://en.wikipedia.org/wiki/Community_property

If you are in a Community Property State, my understanding is that even if only one spouse is going on the mortgage, all debts from both spouses will be used to calculate the debt to income ratios. The debt to income ratios will play a role in determining how much you can afford and loan program (FHA currently allows up to 56.99% whereas Fannie Mae has a cap of 45% in most situations).

I have never originated a loan in a Community Property State, so I would do some additional checking before making any decisions.
T.C. Strait
Ohio Loan Officer / Manager @ Mortgage Broker
NMLS ID 164070
<a href="http://www.ohiomortgagesolutions.com">Ohio Mortgage Solutions</a>
<a href="http://www.ohiofha.com">Ohio FHA Mortgage</a>

Strummin365
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Re: Mortgage Application

Postby Strummin365 » Thu Mar 14, 2013 3:58 pm

Ok, so what if I have paid all my debt except for about $10,000 on a student loan. I would still have collections on my account, but not active ones. My debt to income ratio at that point would be very low. I make about $55,000 a year currently. Would it be in our best interest at that point to sign one together or should I still allow only her to apply? Generally speaking, of course!

TCstr8
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Re: Mortgage Application

Postby TCstr8 » Fri Mar 15, 2013 6:32 am

I just want to reiterate that I do not know the exact guidelines for community property states, and you didn't state whether you are in one or not.

Assuming that you are in a community property state, my understanding is that the debts of the non applicant spouse are used in the debt ratio calculation, but that the credit score does not impact the loan.

If that is accurate, and your spouse can qualify for the mortgage without your income but with your debts, and her credit score is higher, then that would get you the best terms.

You would be MUCH better off talking to a loan officer in your area about this. Ask family/friends if they have someone they would recommend.
T.C. Strait
Ohio Loan Officer / Manager @ Mortgage Broker
NMLS ID 164070
<a href="http://www.ohiomortgagesolutions.com">Ohio Mortgage Solutions</a>
<a href="http://www.ohiofha.com">Ohio FHA Mortgage</a>

akim1220
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Re: Mortgage Application

Postby akim1220 » Sun Mar 17, 2013 4:44 pm

TCstr8 wrote:You can always apply for a mortgage seperately. However, the State that the property is in will factor into whether or not the non applicant spouse's debts have to be counted against the applying spouse.

http://en.wikipedia.org/wiki/Community_property

If you are in a Community Property State, my understanding is that even if only one spouse is going on the mortgage, all debts from both spouses will be used to calculate the debt to income ratios. The debt to income ratios will play a role in determining how much you can afford and loan program (FHA currently allows up to 56.99% whereas Fannie Mae has a cap of 45% in most situations).

I have never originated a loan in a Community Property State, so I would do some additional checking before making any decisions.


Thanks for this info TC. We will be looking for a house in PA, a non community property. My wife's student loan is in her name so I should not include her on any mortgage applications so that my loan to debt ratio will be smaller. But we can still put her name on the title. Do I have this correct?

Tightwad
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Re: Mortgage Application

Postby Tightwad » Sun Mar 17, 2013 6:42 pm

akim1220 wrote:
TCstr8 wrote:You can always apply for a mortgage seperately. However, the State that the property is in will factor into whether or not the non applicant spouse's debts have to be counted against the applying spouse.

http://en.wikipedia.org/wiki/Community_property

If you are in a Community Property State, my understanding is that even if only one spouse is going on the mortgage, all debts from both spouses will be used to calculate the debt to income ratios. The debt to income ratios will play a role in determining how much you can afford and loan program (FHA currently allows up to 56.99% whereas Fannie Mae has a cap of 45% in most situations).

I have never originated a loan in a Community Property State, so I would do some additional checking before making any decisions.


Thanks for this info TC. We will be looking for a house in PA, a non community property. My wife's student loan is in her name so I should not include her on any mortgage applications so that my loan to debt ratio will be smaller. But we can still put her name on the title. Do I have this correct?

I highly doubt that will work. All of the lenders I have ever dealt with always have the loan & the collateral documents in the same name(s).

bpgui
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Re: Mortgage Application

Postby bpgui » Sun Mar 17, 2013 7:12 pm

Tightwad wrote:
akim1220 wrote:
TCstr8 wrote:You can always apply for a mortgage seperately. However, the State that the property is in will factor into whether or not the non applicant spouse's debts have to be counted against the applying spouse.

http://en.wikipedia.org/wiki/Community_property

If you are in a Community Property State, my understanding is that even if only one spouse is going on the mortgage, all debts from both spouses will be used to calculate the debt to income ratios. The debt to income ratios will play a role in determining how much you can afford and loan program (FHA currently allows up to 56.99% whereas Fannie Mae has a cap of 45% in most situations).

I have never originated a loan in a Community Property State, so I would do some additional checking before making any decisions.


Thanks for this info TC. We will be looking for a house in PA, a non community property. My wife's student loan is in her name so I should not include her on any mortgage applications so that my loan to debt ratio will be smaller. But we can still put her name on the title. Do I have this correct?

I highly doubt that will work. All of the lenders I have ever dealt with always have the loan & the collateral documents in the same name(s).

This can be done. I have clients that do this all the time, one takes out the loan but both are in title. It is common for in several situations... one has horrible credit, one is self-employed in a new business, one has a ton of debt, etc. The lenders just require the non-borrowing spouse to sign off on the mortgage (not the note) to release their homestead right or sign a separate waiver of the homestead right. At least that's how it is done in Illinois.

Tightwad
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Re: Mortgage Application

Postby Tightwad » Sun Mar 17, 2013 7:27 pm

bpgui wrote:
Tightwad wrote:I highly doubt that will work. All of the lenders I have ever dealt with always have the loan & the collateral documents in the same name(s).

This can be done. I have clients that do this all the time, one takes out the loan but both are in title. It is common for in several situations... one has horrible credit, one is self-employed in a new business, one has a ton of debt, etc. The lenders just require the non-borrowing spouse to sign off on the mortgage (not the note) to release their homestead right or sign a separate waiver of the homestead right. At least that's how it is done in Illinois.

And this is part of the reason why the mortage industry has been in the crapper the last few years.


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