How hard is it to buy a Prop in your spouses name?

Question

I bought a home during the tail end of the bubble in Ca prior to getting married. The home is titled in my name only, I got married shortly after I bought the home in which I am $125K +/- underwater with.

When I bought the home originally, my intent was to get married, start our family and within 4-5 years buy something larger for our growing family in an area with better schools. At the time I could not afford to live in the area I wanted too, with the better schools, but could today.

I tried to sell my prop short this past winter and had two offers, two BPO's and thought all was good & done when the bank came back and didn't approve the SS stating it's not a hardship for me.

I've decided to let the property go unfortunately as the bank is unwilling to work with me. I cannot afford to rent my home as market value for rents on my sized home would have me throwing $600-$900/ month to cover the difference on the mortgage. Plus I am worried a renter might damage my home where I would have to spend big $$$ to repair while I still had no equity in the home loss/ loss situation.

My question is this, I know my previously pristine credit will sink like a rock thrown from a 10 story building, but realistically how hard would it be to buy a Home or rent a place by just using my wife's credit for the next 7-10 years while I re build my credit.

I was told I technically could have my wife purchase a home with 20% down. The downside is she make considerably less than I so that would effect what kind of home we shop for.

Any help greatly appreciated in advance.

Don Konipol · Answer

Your wife can qualify for a mortgage in her name alone, but only her income will be considered when figuring the size of the loan she can qualify for.  Your alternative would be an unconventional situation, i.e, a home purchase using owner financing, or a wrap around to an existing mortgage.

While you would have to search harder to find the above menioned deals, they are doable in todays real estate market. As per renting a house, if the foreclosure is the only blemish on an otherwise good credit report, you should not have much problem as the largest pool of renters is currently made up of people who have lost their homes in foreclosure.

Jon Holdman · Answer

You shouldn't have too much trouble renting after the foreclosure even using your own credit.  Landlords realize what's going on.  Some may deny you because of your credit, so your choices may be somewhat more limited than if your credit was better, but you'll find something you like.

Assuming you do have otherwise good credit and income, you should be able to buy something with your credit in five years.  That's the current guideline, anyway.  Who knows what the guideline will be in the future.  If anything, I'd suspect it will be loosened, not tightened, since so many people are in the same situation.

Curt Davis · Answer

Ryan,

You should try to buy your next home while your credit is still good.  Once you get your new home then give the other one back to the bank.

Dale Osborn · Answer

Avoid banks for the purchase of your next home by having the Seller finance the loan. This way, you do not need to worry about what your score is! I personally do not care for credit scores as they belong to you and every tom dick and harry can put data on it and you cannot fix your own credit report. Then as an investor, commercial banks do not want to pay the fees involved in reporting to the credit agencies so our loans from 1994 to the present do not show on our credit reports. If the data was accurate what would our scores be? We will never find out due to the chepiness of the banks in refusing to put the good data on the report. Let it be bad data and see how fast they react in putting it on your report!

Steve Babiak · Answer

So give the credit for a community of rentals to these former "owners", not the investors who are putting these properties to the best available use.

Ryan Johnson · Answer

The problem with the current home is... we live in a newer but abandoned and unfinished master planned  community situated as an afterthought in a somewhat undesirable city. The School district has the lowest scores and least money. I fear for my wife shopping after 8:00 PM, someone is always asking us for money when we go to the store or buy gas. My truck has been broken into twice in front of my home and several homes have been broken into or had landscaping materials stolen. My neighbors home to my right was broken into while he was on vacation and they stole his Durango that was in the garage.

The bank owned  homes on my street look terrible, and of the three 1/2 years we've lived here out of 30+ homes on our street subdivision we are one of 5-7 families that bought new when the prices were still high. Everyone else is now renting, or bought their home recently as a foreclosure or short sale. I don't think my home will ever be worth what I paid or even close, I worry more about the value recovering as lots of investors have bought these and made our community a huge rental community.

That said I'm sore on buying any home for now, some days I wake up and think why would I ever want to buy another home at all? Others I think well perhaps we will take our time and look and find something down the road that we can call our home.

Curt my credit isn't good anymore, while I was trying to SS my property the bank would not even talk to me until I was three months in the rear on payments. Ironically after three months of doing this to try and get somewhere with the bank by score dropped from 733 to 610 just from stopping payments for three months. I paid the balance in full while I waited to see what my next strategy would be, but now have decided to walk. I really want to end the sleepless nights thinking about my looses on the home, the phone calls from my lender, the sending paper work, bank statements and financials, the depression. I'm ready for this to be over.

How hard is it to buy a Prop in your spouses name?

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