If your husband has a two collection accounts and you have perfect credit yet he's the one with the income can you get approved for a mortgage?

Answer 1

Yes, your perfect credit will bring your combined scores up. When you jointly apply for a mortgage they use both of your middle scores to decide on the loan, interest rate, etc. So one without the income but better credit can help the one with the income and not as good credit

THEY WILL ONLY USE THE PRIMARY WAGE EARNERS MIDDLE SCORE (YOUR HUSBAND) TO DETERMINE THE RATE AND TERMS OF THE LOAN. YOU CAN STILL GET APPROVED FOR THE MORTGAGE, BUT IT WILL BE BASED ON HIS CREDIT.

I wouldn't futz around---I'd do all I can to pay off the husband's open collections prior to underwriting a mortgage. The amount to pay off the collections will likely be much less than the cumulative mortgage payments you'll be making if you have to settle for a higher interest rate. With his lower credit, total interest payments on a 30yr 250,000 loan at 7% will be $363,043.00. If you pay a few hundred or thousand dollars to pay off his collections, total interest payments on a 30yr 250,000 loan at 6% will be $304,595.47, almost a $60,000 difference.

You might say--"we won't keep it for 30 years"...but remember how a mortgage amortizes---in your first five years of a house, if you make a 1500 payment, at least 1200-1300 goes straight to interest. Most of the interest is paid in the first 15 years, after that, you're paying mostly on the equity.