If your spouse has bad credit in San Diego, but you’re trying to qualify for a mortgage loan, don’t panic.  There are still a few steps you can take to making sure you can take out a loan for the home of your dreams.  Here are some of the options Greater Home Loans present to you:

Buy the home without your spouse on the loan application.

This option is fairly self-explanatory.  If you’re worried about your spouse’s credit score, don’t put him or her on the loan.  By doing this, you will receive a far better interest rate than you would have with your spouse’s low credit score.  The downside to this is that your spouse’s income won’t be included in the loan application.  Therefore, if you don’t have a large enough income to qualify for the house alone, this won’t be an option for you unless you want to look for a smaller house

Deal with the higher interest rate.

If your spouse has a low credit score and you apply together, you will both have a low interest rate.  However, some couples choose to just deal with this factor due to the fact that they can use two incomes.  Keep in mind; lenders in San Diego use the lowest mid score between the two spouses.

For the most part there are three tiers in mortgage qualifying that have major impacts on your mortgage interest rate.  There is everything above 740; everything below 680; and everything in between.  Of course there is every below 620 that may force you out of financing.  Let your ROM Consultant help you understand these.  Then there are tiers within these tiers that have smaller impacts on your interest rate.

Work on your spouse’s credit score

The last option is to spend some time improving your spouse’s credit score before you apply for a house together.  If you really put in an effort, you can improve your spouse’s credit score in as little as one or two months.  However, depending on the severity of the credit score, you might need to work on it and hold off on buying a house for a year.

Most credit issues can be solved with time and money by YOURSELF.  Borrowing money to take care of credit issues may be a better use than gift funds from relatives for a down-payment.

If it is too much to handle, shoot us a quick email and we’ll recommend an inexpensive credit repair agency.