can anyone explain to me how it works when 2 people apply for a home loan together, one person with scores in the mid to high 600s, another with score in the high 500 low 600 range? she doesnt make much but has a high credit score, while i make pretty good money with a horrible credit score. how will this effect us when we go to the bank and talk to a lender?
In our case they took the lower of the two scores and used that for the interest rate. A score of 620 is decent and anything lower may get denied or have outrageous rates. Of course anything higher is a lot better. I would first try to raise the lowest of the two scores to (average w/all three bureaus) to at least 620. If you make good money but have a low score and she makes okay money but has a good score I would work on paying down your debt to raise your score. I know how hard that is and still try and save for the down payment. Even "no down payment" will require money so don't be fooled. Good luck.
our only debt is about 18k between the 2 of us for car loans, and have about 15k in cash. im hoping that we will be alroght, im doing all i can to improve my scores. the thing that is killing my score is that i have a few paid collections on each report.
Lenders will use the middle score of the primary borrower(that is the one who makes the most money) Your alternatives to use the higher score is 1. Bank statement programs- this allows you to combine your incomses and use the higher score 2. Stated income program- also allows you to use higher score but more rules to do it
