Using a partner's income can really increase your chances of getting favorable loan terms and qualifying for the house you want. The more income you use to qualify for the loan, the greater the dollar amount you'll qualify for.
You cannot simply list a spouse's income with, or instead of, your own if you apply in your name alone. However, you can list their income if your spouse agrees to become a “co-borrower” on the loan. It's possible to use your spouse's income on a loan application, but only under strict circumstances.
If your spouse can't prove income, there's not much benefit to having them on the loan. If they lack provable income but have debt, they may throw off your debt-to-income ratio, which could keep you from qualifying.
If you're applying for a joint mortgage, lenders will consider both of your credit scores. Many will pull scores for both spouses from each of the three credit bureaus and use the middle score for the spouse with the lower scores. If only one spouse applies for the mortgage, only their credit scores will be considered.
Some lenders allow both partners to apply for a mortgage together. This may help you and your partner qualify for a larger mortgage because your incomes are combined. If one partner has a weak credit score, the lender may base their lending decision on the lower credit score.
If your spouse has a bad credit score, it will not affect your credit score. However, when you apply for loans together, like mortgages, lenders will look at both your scores. If one of you has a poor credit score, it counts against you both. You may not qualify for the best interest rates or the loan could be denied.
Credit score required: 620
Conventional loans are the most common type of mortgage, accounting for about 70% of the market. They usually require a 620 credit score, though some lenders will consider applicants with scores as low as 580.
Credit score and mortgages
If lenders review all the information and determine that you are likely to make your mortgage payments in full and on time, you may be able to get better loan terms. The minimum credit score needed for most mortgages is typically around 620.
On a joint mortgage, all borrowers' credit scores matter. Lenders collect credit and financial information including credit history, current debt and income. Lenders determine what's called the "lower middle score" and usually look at each applicant's middle score.
If you inherit a home after a loved one dies, federal law makes it easier for you to take over the existing mortgage. If your spouse passes away, but you didn't sign the promissory note or mortgage for the home, federal law clears the way for you to take over the existing mortgage on the inherited property more easily.
Yes, it is possible. A lender can help you make the right decision for your circumstances. If eligible, it's important to consider that getting a mortgage without your spouse may mean that only your name will be on most loan documents, including the Promissory Note for the property.
What Happens If Your Spouse Is Not On the Mortgage. If your spouse is not on the mortgage, they are not responsible for paying it. However, the mortgage lender can foreclose on the house if the mortgage is not paid.
The minimum credit score to buy a house in California is 580.
If you live in a community property state, FHA and Department of Veterans Affairs (VA) lenders will factor in your spouse's debts even if their name is not on the loan application. 56 Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
In a community property state, it is possible to leave your spouse off the mortgage. However, if you're trying to obtain an FHA or VA loan, your lender may have to consider your spouse's debts when you apply. This may impact your eligibility. If you live in a common law state, it's less complicated.
Conventional loan | Credit score: 620
To qualify for a conventional loan, you'll need a credit score of at least 620, though some lenders may choose to approve conventional mortgage applications only for borrowers with credit scores of 680 and up.
The required credit score to buy a $300K house typically ranges from 580 to 720 or higher, depending on the type of mortgage. For an FHA loan, a popular choice among first-time homebuyers for its lower down payment requirement, the minimum credit score is usually around 580.
You can borrow $50,000 - $100,000+ with a 720 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.
Most conventional loans are backed by mortgage companies Fannie Mae and Freddie Mac. Fannie Mae says that conventional loans typically require a minimum credit score of 620.
To qualify for most types of mortgages, you'll need a credit score of at least 620. Some loan types, such as FHA loans, accept lower scores, but a higher score will almost always get you the lowest available interest rate. And that could save you a significant amount over your loan term.
If you have poor credit, consider an FHA loan, which allows for credit scores as low as 580 (or 500 if you can make a 10 percent down payment on the home). If you're eligible, a VA loan (for service members and veterans) or a USDA loan (for buyers in rural areas) might also be easier to qualify for.
An FHA mortgage is usually the easiest home loan to get. You can qualify with a credit score as low as 580 (with a 3.5% down payment) or even 500 (with a 10% down payment).
Can I get an FHA loan with no down payment? The FHA loan always requires a down payment of at least 3.5%. However, the money doesn't have to come from your own savings. FHA accepts multiple down payment sources, including gift money and grants or loans from first-time home buyer programs.