Why can't the lender use only my husband's credit score to approve the loan?

[vilnel8782]

Hi,
I am new to this forum...I have a question.  My husband is in the process of applying for a FHA/Bond mortgage loan to purchase a new home.      His income is Social Security (SSD),  the income is broken down in four, meaning he gets the largest amount of income in one check and me and our two children get 3 smaller  beneficiary separate checks.      When my husband submitted the 1099 forms, he was told that in order to use the total income,  that they need to add me to the loan and require both credit scores.    My husband  would like to use only his  score  because mine is too low.       I don't understand why,   they are counting my income as separate,  when the 1099 forms have my husband's social security number on them. I am not employed, the total income it's all part of his Social Security benefits.      Back in 2007, we got a mortgage, using only my husband's score and our income was the same as now,  (Social Security) the total household income was used to obtain the loan and I was only on the deed.    Is this a new rule?     Or is it, what  this lender requires?   Please help!   We have been renting a home for 4 years now, have great rental history, really want to be homeowners again.
 

                                        Thanks for reading, 

[TomnTex]

I would say that his income is low and that they need both yours and the kids on it to help raise it. One thing you can do if it's not already done is to have him be made payee for the kids. That will raise the income a bit. SS can do that with a quick appearance at their local office, then get a letter from them showing that. I had to do that before I bought my home four years ago.

 

As a final effort, you may have to add your info even though it's not great. I've dealt with SS for fifty years and have had to jump through their hoops many times. Good luck.

[WhoCares1000]

Also, the bank may want you on the mortgage in the event of a divorce so that they have 2 parties to go after rather than one.

[vilnel8782]

Thank u so much...for your advice, Tomn. Yes, if it's only my husband's income on the mortgage, then it would be too low to qualify, maybe for a hut...lol, but not for the home. Once again, thank u:)     

[TomnTex]

What they are also looking at is if something happens to him, how will you be able to afford the loan after he is gone. Just the way they think.

[Patz]

It might also be a function of the lender.  If I were you, I would make some calls to a few lenders and ask about their policy.  Married people have the right to apply for & get a mortgage in the name of one spouse - done all the time.  But the source of the income could present some difficulty there.  Is your husband receiving SSDI or SSI?  It could make a difference in applying for a mortgage.

[1stStep]

Generally, regular SS income is grossed up 25% ( so $1,000 in SS equates to $1,250 for underwriting purposes)

 

I don't know if underwriters treat SSI or SSDI the same.

[willingtocope]

There was a law on the books here in Iowa that said unless both spouses' names were on a mortgage, the mortgage was null and void.  It got repealed a couple years ago, but not until a few people got "free" houses.

[myscoresawful]

Hi,

I am new to this forum...I have a question.  My husband is in the process of applying for a FHA/Bond mortgage loan to purchase a new home.      His income is Social Security (SSD),  the income is broken down in four, meaning he gets the largest amount of income in one check and me and our two children get 3 smaller  beneficiary separate checks.      When my husband submitted the 1099 forms, he was told that in order to use the total income,  that they need to add me to the loan and require both credit scores.    My husband  would like to use only his  score  because mine is too low.       I don't understand why,   they are counting my income as separate,  when the 1099 forms have my husband's social security number on them. I am not employed, the total income it's all part of his Social Security benefits.      Back in 2007, we got a mortgage, using only my husband's score and our income was the same as now,  (Social Security) the total household income was used to obtain the loan and I was only on the deed.    Is this a new rule?     Or is it, what  this lender requires?   Please help!   We have been renting a home for 4 years now, have great rental history, really want to be homeowners again.

 

                                        Thanks for reading, 

There is a good reason for that.  The children's checks are just that. The children's.  This money the children receive is NOT your husband's income. Period.  Neither is yours, your husband's income.  The bank is really only seeing the one check that is made out to your husband as his income.  It's probably not enough and are suggesting that adding yours would increase income on the application, however, to add your check would mean to add you to the loan and so they would have to run your credit also.

 

I agree with TomnTex, if your husband is made the children's payee, then he could count their SSA checks because that money CAN be used by the payee as long as it is a beneficial necessity to the children and a rood over their head certainly is.

 

I don't know if it was explained to you by SSA (because they don't always make everything very clear in my opinion) is that you must keep up with where every penny of the children's checks are spent and they can request that proof at any time without notice.  Hopefully you are keeping receipts, and if not, I would start doing so immediately. 

[TomnTex]

My score is right. I had to have my child's check transferred from her to me so that I could show that the money was being used for housing etc.

[Brandi34]

I receive SSA and benefits  I receive 1593$ month and I am payee of the two kids ,which they get 400$ each a month I can't be on the home loan because of shotdy default judgment,which im i n the process trying to appeal,set aside now!! But we need kids or mi e or both inco e to qualify?? Can I appoint my husband as payee over our income and the underwriter of home loan use ssa income as his since he is payee and he uses it provide for us?

[Flyingifr]

Mortgage lenders don't like to "ignore" anything - they are always looking for some mole hill to turn into a deal-breaking mountain. The last time I took out a mortgage (this was 2 houses ago) my wife and I had more than enough provable pension income (State pensions and Social Security) to easily qualify for a mortgage - our loan was 50% of value with a 50% down payment, our DTI was Zero (no debt) and all other ratios were well within underwriting standards. I also had a side business but I did not want that income figured into the deal, knowing that self employment income automatically raises the interest rate and increases the fees because the banks just don't want to lend to the self employed. Remember - if I had shut down my business the year before I bought that house, it would have been a"plain vanilla" mortgage that would have sailed through underwriting at the speed of light.

 

It was not to be. I had to give them two years of business account bank statements and explain every deposit over $500 - as if businesses never had customers). We almost lost the house because no one would tell me why they cared if my proposed housing costs were 19% of income (using the pensions only) or 12% of income (adding in my self employment income). Underwriting at the time was approving loans with housing ratios in the 40's.

[MORTICE]

By the way, I also recently took a loan for repairs in the house, which I regret. I had huge renovation plans. First of all, I wanted to upgrade the heating system and buy radiators for sale, but something went wrong. After talking with my friend, I found out that now people take loans from banks, but conclude contracts on unfavorable terms with a large overpayment. If there is no urgent need, it is better to postpone the application. I had no need as such, just the conditions seemed favorable. According to him, it would be ideal to wait until September 2022. Then, according to forecasts, rates should decrease, and prices for goods and services will become less.