If my wife has excellent credit and I have OK credit, but make more how do home lenders decide the intrest?

Posted on Mar 19, 2024 in FHA Information

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Question by juneau601: what does this mean: 1.To use HARP, pills you must have less than 20% equity in your home ?
I have no clue what this means, Can you please help ? 1.To use HARP, you must have less than 20% equity in your home.

Thank you again.

Best answer:

Answer by Hugh G
HARP, Home Affordable Refinance Program, is the federal government’s mortgage bailout program. To be eligible for a new loan with lower interest rate that is guaranteed by the U.S. government, a homeowner must have no more than 20% equity in their house. That means that their mortgage balance must exceed 80% of their home’s market value.

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Question by Jay T: If my wife has excellent credit and I have OK credit, more about but make more how do home lenders decide the intrest?
My wife has excellent credit, pilule and I have OK credit, patient but I make more then her. We both need each others income to afford our new home. How do lenders decide what intrest rate to give us?

Best answer:

Answer by Steve D
They will look at the overall risk involved – they each persons credit score to decide whether to make the loan (if yours is below the bank’s lower limit, you will not get the loan) and then the underwriter will work some magic to determine the overall risk. Expect that if you qualify, you will not get the best rate.

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2 Comments

  1. We use the middle of your and your wife’s three scores, then the lower of your wife’s or yours. Income doesn’t matter. We also take into consideration your loan to value and your debt to income ratio. Okay so income does matter, but not a direct factor.

  2. Lenders examine all facets of your financial situation, along with your credit ratings in determining rates, approval or denial. In general, the levels of your income mostly determine how large a mortgage you may get, while credit histories are used to determine the levels of risk involved for the lender.

    Your credit ratings and LTV are what will determine the interest rate offered.