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Replies (11)
- Manuel Prado, "Manuel Prado"
- Contributions:196
The programs use the lowest of the credit scores. If you have sufficient income and employment history to qualify on your own, then the lender will not consider your husband's credit score. You will need to qualify with your husband's debts also. If not, you can use a non-occupant co-signer for the FHA loan. USDA does not allow co-signers.
- wetdawgs
- Contributions:26804
If you wish to use both incomes to qualify, then the lower score will count. If you wish to qualify on your income alone, then the lower score won't be part of the process.
- Travis Penny, "travispenny"
- Contributions:3
As stated above you have to use the lowest score to qualify. If you do not qualify with just your income, FHA allows a non-occupant co-borrower. If you had a relative that was willing and able, you would be able to use their income and credit score to qualify. This is an option a few of my clients have used with success.
For your second question: Mortgage Brokers find a lender for you and take a fee to do so. This usually means that they will have a higher Interest Rate because they are compensated by YSP (Yeild Spread Premium). A lender, or atleast a someone who is a correspondent lender is, for the most part, your best option. Click Here for an article that explains Mortgage Brokers, and Banks.
Good Luck!
For your second question: Mortgage Brokers find a lender for you and take a fee to do so. This usually means that they will have a higher Interest Rate because they are compensated by YSP (Yeild Spread Premium). A lender, or atleast a someone who is a correspondent lender is, for the most part, your best option. Click Here for an article that explains Mortgage Brokers, and Banks.
Good Luck!
- Clay Branch, "Georgia Loans"
- Contributions:7835
This usually means that they will have a higher Interest Rate because they are compensated by YSP (Yeild Spread Premium).
Travis, you sure you have been in the business for 6 years and not 6 weeks?
Travis, you sure you have been in the business for 6 years and not 6 weeks?
- Steve Felty, "SteveFelty"
- Contributions:396
Now that Travis brought this to the forefront, I would like to add that while you can be the only one on the loan, USDA must consider the entire household income (RD has maximum income limits),
I would like to encourage anyone considered RD financing this spring to select a lender with significant RD experience. With the uncertanity of when RD's allocation will be 'spent', this is not a time to risk losing out on the program.
I would like to encourage anyone considered RD financing this spring to select a lender with significant RD experience. With the uncertanity of when RD's allocation will be 'spent', this is not a time to risk losing out on the program.
- Travis Penny, "travispenny"
- Contributions:3
Mr. Branch...In Georgia...How are Mortgage Brokers compensated? YSP is not a form of compensation for Mortgage Brokers? Please enlighten us, as you have criticized my answer, but did not leave one yourself.. Thank you for your input.
- Clay Branch, "Georgia Loans"
- Contributions:7835
Surely, Mortgage Brokers have the option to charge upfront fees, collect YSP, or a combination of both. If someone wanted a no origination loan or complete no closing cost loan, the only way to do that is to use YSP and higher rate. If a correspondent or direct lender were structuring a loan with no origination or no closing costs, you would also use premium pricing which is no different. You are implying it will cost more to use a Broker than a lender because you are a lender. I would direct you to the top 5 Zillow lenders of which 3 are Brokers. If I were to quote an 80% LTV, 740 score 30 Yr loan, 350K, it would be 4.75% and an origination fee of $2275, or .65%, and that loan is par and pays no YSP.
- Murphy Team, "Murphy Team"
- Contributions:184
Just had an RD loan application where the combination of income put the buyers over the qualifying range. I presume, but cannot be sure, that they use both borrowers to qulaify.
- Troy Williams, "Troy Williams ME RE"
- Contributions:70
There have been some very good points made here, I will add a few not mentioned and try not to be repetitive of what has already been said.
In Maine Mortgage brokers can no longer make money off the Yield Spread Premium (YSP) but rather are compensated the same no matter what the rate is. I thought this was part of the Dodd Frank bill that recently passed but it may only be a state issue.
Secondly, if you don't HAVE to buy in Portland Maine but are open to looking in the surrounding towns you can apply for a RD Direct loan rather than an RD Guarantee. The RD Direct allows flexibility for lower credit scores but isn't allowed in towns with populations over a certain threshold. RD Direct is also tougher on income limitations since it is founded by the government directly and is designed to encourage home ownership for those who may not be able to qualify in the secondary market.
FHA doesn't require as high of credit scores to qualify and as someone mentioned you can have a non-owner occupant co-signer. The big difference between RD and FHA is that RD is 100% financing and has a funding fee rather than monthly mortgage insurance. FHA requires 3.5% down and has a hefty monthly mortgage insurance premium.
In Maine Mortgage brokers can no longer make money off the Yield Spread Premium (YSP) but rather are compensated the same no matter what the rate is. I thought this was part of the Dodd Frank bill that recently passed but it may only be a state issue.
Secondly, if you don't HAVE to buy in Portland Maine but are open to looking in the surrounding towns you can apply for a RD Direct loan rather than an RD Guarantee. The RD Direct allows flexibility for lower credit scores but isn't allowed in towns with populations over a certain threshold. RD Direct is also tougher on income limitations since it is founded by the government directly and is designed to encourage home ownership for those who may not be able to qualify in the secondary market.
FHA doesn't require as high of credit scores to qualify and as someone mentioned you can have a non-owner occupant co-signer. The big difference between RD and FHA is that RD is 100% financing and has a funding fee rather than monthly mortgage insurance. FHA requires 3.5% down and has a hefty monthly mortgage insurance premium.
- jebus51881
- Contributions:6
I had a median credit score of 659 and my spouse's median was like 489. I got an FHA loan no problem but she wasn't allowed to be on the mortgage. Thankfully my income was high enough that I could still be approved for the loan anyway. But I've had perfect credit for 6 years and with my problems now 6 and half years back and about to come off my credit report the lender didn't see me as a risk. But if both spouses will be on a mortgage I'm pretty sure they both have to meet the minimum score guidelines.
- barb10john
- Contributions:5
The lowest credit score counts - yours, or your husband's. Secondly, a good mortgage broker can link you to a good lender - don't worry about YSP costs in Maine. They are insignificant now. My friend's wife had a lower credit score; he found the best terms to finance his dream home through Dan Carey in ME.
Do both spouses need good credit to qualify for an FHA or RD mortgage?
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