FICO or salary,which one decides "borrower"?

Mike · #1 (**permalink**) 01-23-2006, 07:33 PM

Hello everyone,
I am new to the LO field. I recently had a full doc refi cash out case where I put the husband as borrower and his wife as co-borrower simply because a LO told me that since the husband has a higher salary he would be the "borrower" anyway. The husband unfortunately has a lower FICO and I made 0.5 point less due to a hit on adjustment in the FICO section of the rate sheet.
I was wondering if the decision of who will be considered borrower is "dynamic" and changes based on lender or loan program.
Or if it's static and the decision never changes. If static, then what criteria do you use?(FICO or higher salary?)
Thank you all for your inputs.

tarasevich.r · #2 (**permalink**) 01-23-2006, 07:37 PM

Quote:

Originally Posted by Mike

Hello everyone,
I am new to the LO field. I recently had a full doc refi cash out case where I put the husband as borrower and his wife as co-borrower simply because a LO told me that since the husband has a higher salary he would be the "borrower" anyway. The husband unfortunately has a lower FICO and I made 0.5 point less due to a hit on adjustment in the FICO section of the rate sheet.
I was wondering if the decision of who will be considered borrower is "dynamic" and changes based on lender or loan program.
Or if it's static and the decision never changes. If static, then what criteria do you use?(FICO or higher salary?)
Thank you all for your inputs.

I was taught that it is static. Whoever has the higher salary is the primary borrower. I've been in the same position as you a couple of times already dood...sux.

tarasevich.r · #3 (**permalink**) 01-23-2006, 07:38 PM

Lemme rephrase that, whoever has the higher income. Income can be comprised of more than just salary.

The Wizard · #4 (**permalink**) 01-23-2006, 07:38 PM

Hi Mike,

Most lenders go off the primary wage earners FICO score. Some Alt-A make an exception but most A paper it is the primary wage earners FICO that will be used.

Have a great day!

tarasevich.r · #5 (**permalink**) 01-23-2006, 07:43 PM

Quote:

Originally Posted by The Wizard

Hi Mike,

Most lenders go off the primary wage earners FICO score. Some Alt-A make an exception but most A paper it is the primary wage earners FICO that will be used.

Have a great day!

This is an answer to a question that wasn't asked. FICO score does not determine who is the primary borrower, which is what he's asking. Highest income determines the primary borrower. FICO starts coming into play when determining loan lenders, loan programs, and rates.

The Wizard · #6 (**permalink**) 01-23-2006, 07:50 PM

Since he is new I thought I would give him more to your answer.
Yes, you are correct he or she who makes the most is the primary borrower, it does not matter where you put them on the loan application.

tarasevich.r · #7 (**permalink**) 01-23-2006, 07:53 PM

I wasn't trying to be a d***, just had a long day.

Come on now lol -GP

The Wizard · #8 (**permalink**) 01-23-2006, 07:55 PM

No Worries, its all good.

Mike · #9 (**permalink**) 01-23-2006, 09:06 PM

Thank you all for your answers. The sad part of that 0.5 point loss is the fact that his FICO is only 2 points short. Do you have any suggestion to improve his score by 2 points quickly before they close in 3 weeks?
Thank you.

HisHouseMortgage · #10 (**permalink**) 01-24-2006, 09:42 AM

If this is a non-conforming loan you could try other lenders.
Novastar uses the average of all six scores, and determines LTV and rate from that #.
Option One will use the CoBorrowers (person who makes LESS money) score. and there are a few others who will do the same.

If this is a conforming loan than I am sorry but I believe you must use the Primary Wage earners score to determine eligability

Good Luck