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Boyfriend and I getting home loan credit question

My boyfriend and I are getting ready to get a home loan together.
He has good credit - his FICO is higher than 700.
My FICO is only 682.  I had a surprise pop up on my credit report - a cell that I paid off said there was a remaining balance and they just sent me to collections.  I have freecreditreport.com so I caught it the second it popped up and paid the bill - but I am really worried that this will affect us.

We are first time home buyers but the place we are getting the loan said we need a score of at least 700 to qualify for a FHA loan for the 3% down.  Do they base that off both scores, or will they be able to give us that loan based on his credit?

We both make decent money - him over 70k and me 45k.  

I had pristine credit a few years back, but went through a divorce and life happened so my score went from a 740 down to 682.  I'm trying to bounce things back up, but it takes time.  

Any ideas on the loan process and if any of this will be an issue?
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April 14 2012 - Rocklin
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Answers (6)

Best Answer
Your best bet is to develop a good working relationship with a lender who can help you get to where you need to be, to participate in the best product in the market, most likely FHA at 3.5%.  Good luck! 
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April 14 2012
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Get an easy loan from a private money lender [deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines. You'll be glad you did.]
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October 01 2012
First things first, you should not need a 700 credit score to get an FHA loan with 3.5% down (the minimum down payment on an FHA loan). If your lender is telling you that I would question it because that is unheard of.

Secondly, with almost any lender out there, based on what you are telling us you should be in good shape. First of all, FHA approvals don't require collections like this to be paid off. So long as all your collections combined are less than $1,000 you are OK. You took care of it so your collections are $0. This will not stop you from getting a mortgage. Not a chance.

Based on what you are telling us your credit should not be an issue. As long as you meet the other guidelines of the FHA loan (income, assets, etc) you are in great shape in getting approved.

Please let me know if you have any further questions or if I can help in any other way...

Sincerely,
Greg

Innerwork Mortgage
Roseville, CA
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April 15 2012
I 2nd Tiffany!  If there is anyway around buying a home with a boyfriend/girlfriend I would reccommend it.  I know that's not what most people want to hear, but if you split there will be major issues.

See if just one of you can get approved for the home and the other can rent or help with the mortgage/utilities until your relationship hits the next level.

If you choose to by together anyway you need to protect yourself by hiring an attorney.

Best of luck!
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April 14 2012
This is unrelated to your question, but PLEASE make sure to consult an attorney and draw up an agreement for how the house will be handled in the event of a break up. It can get very expensive and quite messy when unmarried folks split and there is real estate involved.
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April 14 2012
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First of all, FHA requires a 3.5% down payment.  Second, both your credit scores have to meet the lenders requirements.  How long ago did  you pay off the derogatory account?  You may have to wait for some time before the impact of that account lessens.  It may take a year, possibly two.
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April 14 2012
 
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