During 2009, this may the single crowd’s new pick-up line. At least it should be if you are looking for a potential mate.
You see, when you attempt to purchase or refinance a home, you are your spouse’s score. The bad score! While most people think we use the main breadwinner’s middle score, the truth is we use the lowest middle score of the two borrowers. In some instances, this could be the difference of 100 points or more.
I see it all the time in my mortgage practice; one spouse has good to great credit and is ready to purchase a home. The other spouse has, oh shall we say, less-than-perfect credit and needs to be on the loan also because it requires their income to qualify.
Best case scenario, the scores are not too bad and the couple will still qualify. While they may have to pay more in interest and fees, they can still close on the loan. Worst case scenario??? We turn them down for the mortgage or refinance.
Because I work closely with borrowers who have poor credit, there may be things that I can do. I may send them to www.usccraonline.com to get attorney assistance improving their scores, but sometimes we can make small changes that will allow the couple to qualify.
Sometimes we have no choice but to only have one spouse on the loan, but both on title. This is usually only possible when they have enough income on their own to support the new mortgage and their current obligations.
So the next time you are picking up a potential mate at the local bar, instead of asking for their “sign” or a phone number, you may want to ask their FICO score instead.
Scott
Your best source for Indiana FHA loans, Indiana USDA Rural Development loans and Indiana 203(k) Streamline loans.