Can I do anything?

[allkreatures]

Recently my partner and I were working with a wonderful broker to buy our 1st home, partner works and has bad credit, my credit is fair, only because I don't have much established, not because it is "bad", all was well until they found out I was a co-signer on partners car loan! then everything seemed to fall apart, as It changed my DTI ratio I am on SSI, and partner works steady, does anyone have any suggestions?

we are so discouraged right now even tho the car loan is up to date, because my credit was better the loan would have been in my name until his credit was repaired, we are living in a substandard home now and need to get out! so we are trying to move a bit fast. any suggestions would be appreciated as we are at a standstill, renting is not really an option at this point as we have cats and a dog, and because I do animal rescue, we are always temporarily working with animals at our house, help? anyone?

[emeraldone]

Do you have at least 5% to put down? if so you can buy a home regardless of your credit.

[RESteve]

Please see rule number two found here. You are more than welcome to contact via PM.

#2. No self promotion of services in public forums - feel free to PM individual members if they specifically ask for a service that you offer, but do not clog up the public discussion forums with posts concerning your own services, these forums are for learning and sharing, not selling yourself.

[REW Reed]

Thanks Steve.

Credit is a tough thing for a lot of people. And for the financial institutions, they use credit as a guide of riskiness. There are so many people defaulting on their mortgage, so many foreclosures taking place, that they are very careful not to lend to the wrong people. Banks like to have money, not real estate. And because they dislike real estate ownership so much, they will often sell foreclosed property below market value.

That is why the co-signing had such a bad impact on your mortgage application. My suggestion, because credit is definitely going to be your stumbling block, is to take the next 6 months to a year and aggressively improve your credit or look into getting the 5% down that emeraldone mentioned. The mortgage companies look at three factors when assessing risk: credit history (not just credit score but how long have you been in good standing and such), debt to service ratio (how much you owe and how much interest you are paying on your debt), and income. If you have a bad credit history, e.g. problems with credit cards in the past or bankruptcy, you can get a secured credit card to improve it. What this is is a card that you pay say $500 to 'secure' and you get a $500 limit. You spent only on what you would buy anyways in a month, and pay the entire balance off after you have received the bill in the mail (usually by the middle of the month). This will increase your credit.

To improve your debt to service ratio, I have heard the best thing to do is either a) regardless of the balance on the debt, pay off the amount with the highest interest on it (usually outstanding credit cards), or b) pay off the one with the lowest balance on it and makes sure, once paid, you don't use it again until after you get the house, then continue to pay off the next higher balance. The latter choice is better if you have had trouble paying off debts in the past, the former if you are a more disciplined person.

The income part is tough because everyone would like to make more money, but how can someone just 'make more'? Since you are in a single income household from the sounds of it, see if you can find something you can do to supplement the income. Also look into any way you can save taxes on what you currently earn. I don't know many good resources, but there are probably places like REW for tax, debt and financial advice out there.

If it's not in the cards right away, it's not in the cards. It's tough, but you have to pull up your socks and realize you really want it and spend a little time working towards it.

[avonreal]

your credit rating doesn't seem too bad, you will still be able to get a mortgage, just try a different lender.

[Homesurfer]

Something is wrong with this story.

You and your partner are both coborrowers on the same automobile loan and they want to count that entire debt against both of you in your debt-to-income ratios when you want to be coborrowers on the same mortgage loan? If you've explained the scenario properly and/or I have understood it properly, they are counting the same debt against you twice.

Your lender is screwing up. This is not standard underwriting policy. It is easy to see how an inexperienced lender can get confused because on a married couple would have a joint credit report and the debt would only appear once. Non-married coborrowers have two separate credit reports and the loan will appear on each credit report.

No matter what happens, you are both not going to be paying the same debt during the same month.

This is a rookie loan officer error. Your lender is either inexperienced and has not explained this properly to underwriting or they are just trying to snake you into a subprime or AltA loan.

Or else I misunderstood the scenario. Or you are checking to see if we know what we are talking about.

(Unless you were applying for the mortgage loan on your own, leaving the partner off because of his bad credit. In this situation, your lender would probably be correct).

[allkreatures]

maybe I didn't explain right. I am co signer on our car loan, by myself because partners credit was bad , the car is in his name, the car loan is up to date, but they consider my cosigning a debt, even tho I do not pay this loan, he does. However since I have the better credit they are counting it against me and/or both of us as an extra 200.00 debt on my credit. I have never paid this loan, simply co signed and there is no problem with the loan being payed which it has for the last 2 yrs..the lenders either average our credit scores and say no, or say no because of this 200.00 dollar co sign on mine alone, so here is where we get stuck..we have the money but no bank wants to lend as they keep saying "with" my co sign my DTI is too high, and partners credit is not good enough, a co sign on a loan I don't pay!!!!!!!

[Homesurfer]

You say, "I am a cosignor on the car loan, by myself."

If you are on the auto loan by yourself, then you aren't a cosignor. You are the borrower. Period. It doesn't make any difference whether someone beside you is making the payment or not. You are the borrower. The debt will count against you and your lender is right.

If you are both on the car loan (on paper) and both on the mortgage (on paper), then your lender is wrong. Underwriting guidelines would not count the debt against both of you.

[Saodavi]

maybe I didn't explain right. I am co signer on our car loan, by myself because partners credit was bad , the car is in his name, the car loan is up to date, but they consider my cosigning a debt, even tho I do not pay this loan, he does. However since I have the better credit they are counting it against me and/or both of us as an extra 200.00 debt on my credit. I have never paid this loan, simply co signed and there is no problem with the loan being payed which it has for the last 2 yrs..the lenders either average our credit scores and say no, or say no because of this 200.00 dollar co sign on mine alone, so here is where we get stuck..we have the money but no bank wants to lend as they keep saying "with" my co sign my DTI is too high, and partners credit is not good enough, a co sign on a loan I don't pay!!!!!!!

Generally speaking, it's a BAD idea to co-sign for anyone. The reason your partner needs a cosigner is because the bank, which is in the business of loaning money and getting paid back, has professional underwriters that think your partner is too risky to loan money to. As a co-signer, you're deciding that you know better than the bank and are volunteering to take the loan in his place. It's almost as if they loaned you the money for the car and then you loaned it to your partner.

The bank knows your partner will probably default on the loan and therefore, you will have to pick up the tab. Thus they're counting it against you in your DTI. IF you are applying together, they'll use both credit scores and count the debt once. You will suffer due to your partners low score. If you apply alone, the co-signing liability will also be applied to you. This is correct and to be expected.

I'd recommend shopping it around to a couple of other lenders. If they all say the same thing, try to get your partner to re-fi his car into his own name. 2-years of on-time payments should be enough for someone to loan him the money.

[allkreatures]

First he has no Intention of defaulting on the loan and I resent that the bank has suddenlt become pyschic Gods to some people, maybe something people take a bit too seriously these days? the loan has been paid BY HIM for the past 2 yrs with no problems, he is in the process of repairing his credit, As I lived with the man fo 8 yrs yes,I believe I DO know him better than the bank Thank you! The car is in his name I am only the co signer.

I am not a fool I co signed so we would have a decent vehicle and we were at the begining of bettering our lives albeit a bit late as we both are in our early 40's, the fact that they don't count 2 yrs of on time payments is we pay by Moneygram and have no proof HE is actually paying OUT of HIS paycheck only his signature on the moneygram, and this is not enough for the powers that be! as I said we are in substandard housing and therefore our rush to try to do this a bit quicker than usual

I have no debt, no outstanding bills, stable Income, no overdue credit cards, yet I am treated like trash because I am not "up to par" with the rest of the world financially at my age as the bank deems it so..forgive me as this has been a learning experience from hell!!.....my 23 yr old daughter was thrown from our SUV window in an accident 3 yrs ago and almost killed she was helicoptered from the scene of the accident because they did not expect her to live, every ounce of money we had saved went to help her with surgery to repair a jaw that no longer exsisted, and numerous plastice surgery and a leg with a metal rod, therapy not covered once Isurance ran out, a lousy lawyer and a small settlement has left this beautiful girl imissing 4 front teeth she works hard as a medical secretary, and has worked since age 15 she loves everything and everyone, forgive me for rambling, but not everyone is financially "where they should be" according to stats....thus our situation for being in the banks' eyes sure to be a risk. here is a picture of my child Thank God I still have her...she will not smile...and has only a small scar thanks to our savings going for her reconstruction, just a reminder everything, even homebuying has its' human side.

http://s29.photobucket.com/albums/c2...t=HPIM0149.jpg