Articles Tagged With: Cosigner

September 16, 2015

FHA Loan Questions: Can Only One Spouse Be Obligated On The FHA Loan?

We get lots of questions about FHA loans where spouses may or may not wish to apply for the loan together. Here’s one such recent question where the couple only wants to have one spouse apply for the mortgage: “Can my wife be the only person on the mortgage? If so do you only use her income to qualify or can you use both incomes. I have a judgment on my credit, but I have more income then she does and that would give us more of a mortgage to work with.” Unfortunately the answer to this question depends greatly on whether or not the couple reside in a state where community property laws apply. Community property laws, which vary from state to state where applicable, have a great deal | more...

August 12, 2015

FHA Loans, Debt-To-Income Ratios, and Cosigning

By Joe Wallace

We received an excellent reader question recently about how being a co-signer on someone else’s financial obligation might affect a borrower’s chances for an FHA mortgage loan. Does being a co-signer have any influence on how the lender views your credit? Your debt-to-income ratio? FHA loan rules published in HUD 4155.1 address these issues. Chapter Four Section C has a heading titled “Contingent Liability On Cosigned Obligations” and addresses this reader question directly. The rules begin by describing what is considered a contingent liability for the purposes of processing an FHA mortgage loan appication: “A contingent liability exists when an individual is held responsible for payment of a debt if another party, jointly or severally obligated, defaults on the payment.” Simple enough. But the FHA goes further in the next | more...

June 5, 2015

FHA Home Loan Rules For Foreign Nationals

By Joe Wallace

FHA home loan rules include guidance for participating lenders who are handling FHA loan applications submitted by non-U.S. citizens. Did you know that according to FHA loan rules, it is not required to be a U.S. citizen in order to apply? However, certain restrictions do apply. According to HUD 4155.1 Chapter Four, Section A, “U.S. citizenship is not required for mortgage eligibility”. However, all applicants must have a valid Social Security Numberr (SSN). That is according to the FHA/HUD official site FAQ section, which states: “For all borrowers, including US citizens, the lender is required to document a valid Social Security Number (SSN) for each borrower, co-borrower, and co-signer on the mortgage. All individuals eligible for legal employment in the US must have a SSN. Each borrower must provide the | more...

Can I buy a manufactured home with an FHA loan?

May 8, 2015

FHA Loans With Co-Signers: A Reader Question

By Joe Wallace

A reader asks, “when can a co-signer be released from the mortgage note when the borrower can show capacity to pay, can the co-signer get out within 6 mo or 12 months showing borrower has the income to pay mortgage?” The problem with answering questions like this is fairly simple–we don’t know the language of the purchase contract. Much depends on what is contained in the purchase agreement and depending on whether or not the reader has already signed legally binding paperwork in connection with the FHA mortgage loan–that makes a big difference in the answer to the question. For example, could a borrower and co-signer who have not legally committed to the sale negotiate with the lender to have such “ability to pay” language included in the mortgage loan | more...

March 19, 2015

FHA Loan Credit Requirements For Non-Occupying Co-Borrowers

By Joe Wallace

A reader asks, “Hi i am trying to get a mortgage but have good credit but low income. I was wondering if someone could help me be a non-occupying borrower with bad credit but excellent income a job help, basically use his income not his credit.” FHA loan rules are very specific about non-occupying co-borrowers. This is because there are many different types of circumstances where a borrower may have an occupying non-borrower, or an occupying co-borrower, or in the case of this reader question, a non-occupying co-borrower. Each of these circumstances is viewed slightly differently for several reasons, and there are circumstances that may apply to one type of borrower that don’t apply to another. For example, a spouse who occupies the home but does not borrow; this situation | more...

February 28, 2015

FHA Loans and Co-Signers: A Reader Question

By Joe Wallace

A reader asks, “My husband and I are trying to assume this fha loan. My debt to income ratio is too high. My mother in law will gladly co sign for us.” “My husband will not be on the loan, just me. Is it possible for my mother in law to co sign with just me on the loan? I’ve called (LENDER NAME DELETED) (whom own the loan) I have gotten two different answers. One lady said yes and now the other today is saying no. I’m waiting on (LENDER NAME DELETED) to call back. I thought as long as it was blood, marriage, or law related they could “ Co-signers and non-occupying co-borrowers are permitted on FHA loans. Depending on the circumstances a non-occupying co-borrower or co-signer situation may | more...

February 26, 2015

FHA Loan Rules For FICO Scores: A Reader Question

By Joe Wallace

A reader asks, “I have an existing FHA insured house in Dallas TX. Two years ago i moved to GA for Job an rented sonce. I am moving again to Houston TX And looking forward to buy a house. I am a professional Engineer and make a Decent salary. But unfortunately have 570 credit score. My wife has a score of 650 but she has no job. Please advise what is the best option to get approved” Let’s see what the FHA loan rulebook says about this situation. According to HUD 4155.1 Chapter Four Section A, all co-borrowers, co-signers and other parties named on the loan would have both income and credit histories examined by the lender: “When determining the creditworthiness of borrowers, coborrowers, or cosigners, the underwriter considers their | more...

February 18, 2015

FHA Loans and Other Major Credit Applications: A Reader Question

By Joe Wallace

A reader asks, “I was hoping to get an FHA loan but I was wondering if my father could cosign? I was also wondering if it would be feasible of me to get a new car. (My current vehicle is giving me serious problems)” FHA loans do permit non-occupying co-borrowers and co-signers. Talk to your loan officer about lender standards in this area, but in general when a family member co-signs or co-borrows there are procedures and considerations. FHA loan rules say that in cases where the LTV exceeds 75%, a loan with a non-occupying co-borrower is limited to a single unit property. The other part of the reader question isn’t quite clear–is the reader asking if the FHA loan can include the purchase of a vehicle? The answer is | more...

November 13, 2014

FHA Loan Credit Issues: A Reader Question

By Joe Wallace

A reader asks, “I am in the process of trying to rebuild my credit, but am finding it difficult to acquire in my own name. I have a bankruptcy discharged in Feb 2013. I make all utility, insurance and rent payments on time or within the allotted grace period. Altho I am financially responsible, I feel it may not reflect in my credit report with few or no recent accounts reporting…” “What length of time will impact my credit report/score with credit card usage?? …My mother recently obtained a small auto loan (on my behalf) thru a credit union to get the most affordable rate & payment option. She has me listed as co-signer, will this also report on my credit & impact my payment history & score as if | more...

October 22, 2014

FHA Loans, Foreclosure, and New FHA Loan Applications: A Reader Question

By Joe Wallace

A reader asks, “I was a cosigner on a FHA loan in 2007 and my ex-boyfriend let the home go into a foreclosure process, the home was paid in full before it was foreclosed. it has been a year that the home has been paid off. Will I still be able to qualify for a FHA loan now? My credit score is good and I have all bills paid up to date including credit cards.” This is a situation that may or may not have applicable FHA loan requirements depending on the circumstances of the foreclosure. Since the reader indicates that the foreclosure didn’t actually happen, there may be a gray area that’s not fully addressed by FHA loan rules. However, lender standards may play a big part in whether | more...