Loan approval

by Steve
(Baltimore, MD)

My credit score is 610, my wife's is 740. Will we have any trouble applying for a loan? Would it be better if I was not on the loan application?

=====ANSWER=====

Hi Steve,

Thank you so much for stopping by my website and asking a question. I especially appreciate being able to offer an answer to your question.

First, let me say that your credit score is not really that low. However, the FHA mortgage which is the easiest loan to get these days, will be your best bet. You may want to take a look at my page first time home buyer qualifications to get some extra details on this subject.

So I'm thinking that with your wife's credit score so high, and if you can get approval for the loan without your income this may be the way you have to go. What you have to remember is if you end up doing that, you will not be able to count your income into the debt to income calculations.

Now, in regards to your score, the lowest credit score that can qualify for a home purchase is 620 for FHA.

I see that you are very close to this and it would not be that hard to increase your score. You may want to look for some credit repair tips to get your credit score up if you need to use your income to help your DTI (Debt to Income) ratio.

Now, with all of that said, once again if you can qualify for the mortgage on just your wife's income and if you have a large sum of money for down payment, you you may want to consider the conventional loan. This type of loan as a lower interest rate than FHA. However it requires a 10% down payment where the FHA loan requires only 3.5% down.

I hope all of this makes sense to you. Sometimes I just get to rampling on. Please feel free to reply to this post if you have further questions.

Kind Regards,

Jeffrey Ragan