Who's score will the bank use?

Here is the scenario, my husband has horrible credit. (score of 314) ouch! We are planning to build a home in a year. My score now is around 661. We both plan on working on our credit. But i doubt his will be up to par by then. He makes more money than I do. I was told that since he makes more money than i do, he will have to be the PRIMARY borrower on the loan. Which means they will be looking at HIS credit. Is it possible to get a bank that will look at my credit instead of his, even though he makes more money than I do? I mean, if they use his score, we may be paying high interest rates out of our butts. I cant have that!!


You are correct ([FYI]my background is in res lending), as presented your husband will be the “primary borrower” if he makes more $. What you may have to do is get a “stated” loan with you as the primary or sole borrower.

As a matter of fact, many lenders (most) will not even let your husband tag along as a co-borrower with a score that low. First, have him make darn sure he has NO further problems. Second, he should start repairing the damage, and his short term goal should be to get his score above 500. Long term depends on his credit situation and how fast he can get above water again. Will take him years not months.

For now you may want to find a good mortgage broker and work on the stated loan option by yourself. (Try to get a referal and watch thier fee’s, points and experience level).

Good luck!

That’s right- however, if you work for someone- W-2 employee, some lenders will not allow you to go stated income, FYI. Also, the amount of income you state must be reasonable for your profession. However, the bank is probably well-versed in this, and will help you with how to structure it. That being said, some bankers also are so rigid, they can’t think outside the box, and may not get creative for you.

What exactly is a Stated income loan? I am a network engineer. I presently make 35,500k. My husband makes 55k. Are you saying that on the loan application, I can indicated that I make around 86k. (of course using my husband’s income). There has got to be some way around this. I am not for sure if I mentioned that I am looking to build a home, so the loan would be a construction to perm. loan. Does that type of loan make a difference at all, as to how creative I can get?


They will use your husbands score because he makes more. If his credit is bad, you may be better off going stated income which means you do not have to provide documentation to prove your income. In that case, you could go alone and possible secure better loan terms. Some lenders, however, will only allow this with a self-employed borrower.

It is true that a stated income loan (ie not providing any documentation of income) may be a good choice for you due to your situation. There are definitely lenders who will do stated income loans for W2 employees (as well of course as for those who are self-employed).

Stated income loans are a little bit of a higher risk than full documentation loan (showing evidence of income and assets), so expect a small increase in the rate for this type of loan.

Again, as was mentioned in a different message, the stated amount of income must seem reasonable for the type of employment you have.

If the lender feels that it would not be reasonable to state your income at the amount you would need to keep your debt-to-income ratios in line, know that there are also “NINA” or No documentation loans available (but only by few lenders). In this scenario, all you provide is a copy of your driver’s license and social security card. No income or asset information is obtained. Obviously this is a high risk loan, so expect the interest rates to be a bit higher than even going stated income. (But, there are lenders that specialize in this so your rates can be quite good considering the risk level).

With your score of a 661, you could do a no doc loan, but you would have to put 10% down. It takes a midscore of 680 to do 100% financing at the no doc. level.

And your husband would not be on the loan…as that score is extremely low. There are some great companies out there that can help repair credit. I know of a good company if you would like their contact info.

I am trying to get a construction to perm loan with this company called Buildmax. There website is www.buildmax.com they finance 100% until the construction is finished. I believe I would have to work with their bank. But I am checking into other institutions that can offer what they can. Does anyone know of any?