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Buy on one income or use VA loan with bad credit?

I am just getting started with looking at a home to buy. I have excellent credit and my only debt is student loans (15k). My annual gross income is 72,000. My husband is a veteran with poor credit (currently working on improving it). He just graduated and is looking for a job in his field. I am looking to buy next spring. My question is, should I attempt to buy on my own so that my husbands bad credit does not ruin our chances of getting a home or should we use his veteran status to get a VA loan? If he does not find employment by the spring can I use his VA loan? I am not sure how this works. Please enlighten me. 
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September 29 2013 - US
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Answers (3)

Another problem with your husband's finances is his limited work history. Usually lenders will want to see at least 2 years of work history. You should look into both options but I would suggest you think about buying it alone because you have strong income and hopefully a strong credit score. On the other hand there are lenders like myself that are able to give out VA loans with credit scores as low as 560. Either way, you should speak with a lender about your options. There are lenders like myself that would be more than willing to speak with you to help you get the loan that you need!

Well I hope this helps! If you have any further questions or if you would like a loan, feel free to contact me!

Good Luck!
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September 30 2013
Well, you are married so the VA Underwriter would be willing to combine both your incomes. Therefore, if your income alone was sufficient to income qualify according to VA guidelines, you could conceivably go that route, even if your husband was still unemployed at the time of application.

That being said, I agree with the sisters, you wouldn't credit qualify for a VA anytime soon and it sounds like his credit might need at least a couple years to get to a point where it would be considered acceptable. So I would say save the VA loan for your dream home years from now and for this one, go with a Conventional, FHA, USDA or a State mortgage program, depending on where you're located, where you're looking to purchase and probably most importantly (since you won't be going with a VA), how much money you have realistically available for down payment and mortgage settlement charges (settlement charges are comprised of hard mortgage closing costs plus pre-paid expenses, such as tax escrows/impounds, homeowner's insurance, mortgage insurance and pre-paid interest).
Also, you could consider refinancing into a VA loan a few years from now from now if rates are lower and/or you want to rid yourself of any monthly mortgage insurance you may be paying.

Best of luck - Andy
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September 29 2013
VA loans have credit related requirements as well.  They are a guaranteed loan to a vet but the vet still has to qualify.  If he is not employed he cannot qualify for the loan by himself.  If he has issues now and they are not an easy fix it might be better for you to go on the loan by yourself and save the VA for another time.

Your income is substantial enough to buy a modest home.  The amount of your debt is important but the monthly payment is also important.  The proposed mortgage payment for the home you are buying plus all your credit card and loan debt are calculated to come up with your debt ratio.  There are limitations to the debt ratio depending on which loan product  you are applying for.
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September 29 2013
 
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