We are FHA refinancing cash out and since we live in a common state they have to consider my spouses debt as well, even though they will not be on the loan. They have said they will continue to monitor my credit through the closing process, but will they also continue to monitor my spouse who is not on the loan. They have already pulled her initial credit report.
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Best Expert Answer
Lender standards and state law may affect your transaction. FHA loan rules in HUD 4000.1 state, "If the Borrower resides in a community property state or the Property being insured is located in a community property state, debts of the non-borrowing spouse must be included in the Borrower’s qualifying ratios, except for obligations specifically excluded by state law." and also, "The Mortgagee must obtain a credit report for a non-borrowing spouse who resides in a community property state, or if the subject Property is located in a community property state."
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