Profile picture for anniej33

Buying our first home, will my husbands credit have a big affect on our interest rate?

My husband and i are starting the loan approval process right now. We have less than 1000 dollars in debt together and a very substantial down payment which i feel will help us.  We both have steady jobs and a good employment background as well.  I have a very good credit score around 770 and my husbands is more around 680.  He has some bad stuff on his credit report from before we were together almost 7 years ago.  I fear that his credit will affect our interest rate and we are also in a time crunch because we need to be moved to our new city by august.  
  • January 04 2014 - North Canton
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Answers (7)

Is your husband uptodate on all his payments post that incident 7 years ago. If yes, I don't think it should matter much. Anyway you have a good enough score. The best course of action would be to speak to various loan officers and then take the one which works best for you. Timing should not be an issue. If you can get a loan approval, on your credit rating alone; go for it-instead of a joint one. That would save both time and cost.
  • January 04 2014
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Talking to your loan officer will help.  If the higher score can do the same amount that both scores will do, you might want to see what which one has the lower interest rate.  I have had clients just use one person on the loan to get the lowest interest rate.  Check to see what your options are before you decide.
  • January 04 2014
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We always have to use the lower of the (mid) scores for all borrowers on a transaction. In this case your husband's is lower. Depending on the day we look at a rate sheet rates: . If you're planning to use Conventional financing, then it's be approximately a difference of a .25% on rate. For example at $100,000 that's $14.00 for a .25% difference on rate per month or roughly $5000 for 30 yrs. FHA, VA, USDA even less maybe a .125% spread. However if you have at least 5% down it would only make sense to go Conventional (the money you'll save on mortgage insurance would be worth it). If I can help answer any add'l questions, I'd be happy to help. Best wishes otherwise, Kimberly Lawson, Licensed Mortgage Loan Originator. Contact and licensing information can be found on my profile.
  • January 04 2014
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Profile picture for JessicaAggson
The lender will consider everything you've stated above and it sounds like it will be in your favor. Your husbands past issues on his credit report were so long ago I highly doubt it will affect your interest rate.
  • January 04 2014
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Profile picture for JoshBarnettREIB
Its not going to effect the interest rate to the point that you will not be able to buy a home.  If the interest rate is not what you are looking for, just buy down the rate.  

Discuss in detail your goals with a local loan officer and complete the loan application and the loan officer will be able to go over everything with you.  
  • January 04 2014
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Profile picture for mgannon12
If it was so long ago, it might not matter.  Most financing companies use what we call DU (direct underwriting).  The system collects all your info like credit, debt, income, etc and makes an electronic decision based on the information provided.  If DU approves you, you should be fine.  If there is any issue that needs to be resolved, it will let you know and you can take care of it.  With your credit scores, I could not imagine you guys not being approved.  Hope this helped.  Good luck!
  • January 04 2014
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Profile picture for mgannon12
If it was so long ago, it might not matter.  Most financing companies use what we call DU (direct underwriting).  The system collects all your info like credit, debt, income, etc and makes an electronic decision based on the information provided.  If DU approves you, you should be fine.  If there is any issue that needs to be resolved, it will let you know and you can take care of it.  With your credit scores, I could not imagine you guys not being approved.  Hope this helped.  Good luck!
  • January 04 2014
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