Home Currently Under Foreclosure And/Or Short Sale: Can Spouse Qualify For Another Mortgage?
If you are married and only one spouse is under foreclosure and/or short sale, the other spouse can qualify for another mortgage loan for a home purchase. Cases like these are very typical where the home under foreclosure and/or short sale is under one spouse’s name and the other spouse is on title but not on the note. The spouse that has no ties to the note can qualify for a residential mortgage loan as long as he or she can qualify with their own credit and income as long as they get an automated approval per DU or LP FINDINGS from the Automated Underwriting System. Rental verification cannot be used since the home the qualifying spouse is not currently paying the mortgage or rent.
Verification Of Rent
Rental verification may be required for mortgage loan borrowers with credit scores under 620 FICO so I strongly recommend that the qualifying spouse have credit scores of 620 FICO or higher and if they don’t, I can help them boost their credit scores so they can have credit scores north of 620 FICO.
Credit And Financial Qualifications
If you are currently living in a home that you are not on the note but your spouse is, you can qualify for a new mortgage loan on a new purchase, but your spouse that is currently under foreclosure and/or short sale cannot be on the mortgage loan. You need to qualify just with your own income and credit. You can qualify for a 3.5% down payment mortgage with a credit score as low as 580 FICO, however, your debt to income ratios cannot exceed 43%. If your credit scores are over 620 FICO, you can qualify for a 3.5% down payment mortgage loan, however, your debt to income ratio requirements will get capped at 56.9%.
Borrowers With Under 620 FICO Credit Scores
Mortgage loan borrowers with credit scores under 620 FICO, the automated system may or may not require rental verification. For mortgage loan borrowers over 620 FICO, rental verification is normally not required. A letter of explanation will be required by the borrower concerning their current living arrangements and what caused the spouse to go into foreclosure and/or short sale. Cases like these are very common where people get married and one of the spouse already owns a home but the other spouse had nothing to do with the home purchase and foreclosure and/or short sale.
If you are in a situation where you are married and your spouse is currently going through a foreclosure and/or short sale but want to see if you qualify for a new mortgage loan in Illinois, Florida, California, Wisconsin, or Indiana, please contact me at 262-716-8151.