Mortgage  Question?
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How Co-Borrower Limited Job History Affects Mortgage

My husband has an inconsistent job history -- he took time off to care for our kids -- but he has a new job with overtime pay. He has little monthly debt but a low credit score. I make a good income but also have a low credit score. Should I include him as a co-borrower when we apply for a mortgage?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

I am going to provide a short answer to your question first and then provide some background information and a recommendation.

In short, because your husband's credit score is consistent with yours and his monthly dept payments are so low you should include him as a co-borrower when you apply for a mortgage. Any income the lender attributes to your husband should improve your ability to qualify for a mortgage and potentially afford a larger mortgage.

The question then becomes how much income will the lender attribute to your husband and that answer is a bit tricky. Lenders usually require borrowers to have a two year employment history to include income from that borrower when you apply for a mortgage. Employment gaps of less than a month are usually permitted as long as the borrower stays in a similar line of work. Explainable employment gaps of up two six months may be permitted as long as the applicant has been back to work for at least six months and has a two year employment history prior to the work gap. Examples of explainable employment gaps include taking time off to care for your children, which sounds like it applies to your husband. Borrowers with extended employment gaps are usually required to provide a letter to the lender that explains the gap and states that their current employment situation is stable. The lender usually verifies the borrower's employment status with his or her employer with a verification of employment (VOE) form or phone call.

You also mentioned that your husband earns overtime income. Lenders also usually require a two year history to include overtime income in your mortgage application. A shorter overtime income history requirement of one-to-two years may be permitted under certain circumstances such as if the income is steady and contractual or if the borrower's mortgage application has other positive factors. If the overtime income steady or increasing, lenders usually use the monthly average for the borrower's overtime income. If the overtime income is inconsistent or declining, lenders use the lower monthly overtime income figure. In short, your husband will likely be required to earn overtime income for at least a year and likely longer for a lender to include that income in your mortgage application.

Depending on mortgage rates and other factors you may not need your husband's income to qualify for the mortgage amount you want. You can use our Two Person Mortgage Qualification Calculator to determine what size mortgage you can afford based on your monthly gross income and debt payments. Based on the information you provided, including your husband's income could provide a cushion or enable you to qualify for a larger mortgage amount. You can use our calculator to evaluate different scenarios for monthly income and debt expenses.

Finally, based on your and your husband's credit scores, the FHA Mortgage Mortgage Program is likely your best mortgage option. The FHA Mortgage Program enables you to buy a home with a credit score as low as 580 and a down payment as low as 3.5%. We provide a comprehensive overview of the FHA Mortgage Program on FREEandCLEAR.

We always recommend that borrowers contact multiple lenders to understand how they would handle your unique situation. You can review FHA lenders in your area by clicking INTEREST RATESWe advise you to contact at least four lenders as qualification guidelines vary. Plus, shopping lenders is the best way to save money on your mortgage.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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