My wife and I are both doing pretty well financially and with our careers, but my credit is a bit shaky while her's is in the 700's. I'm trying to get involved in buying rental homes for cashflow, but I'm pretty confident I would be denied, but I'm assuming she might not be.
Would we be able to co-sign on a loan? I'm not really sure how this process would work. We also don't own a home (we rent an apartment) so we can't use that as collateral.
If you’re both on the loan both your credit will matter. If your credit is that bad, you could just get a loan in her name
If you want to come on loan you need to fix your credit to get better interest rate. Most of lenders has 620 minimum FICO requirement for investment property. Or she can take loan liability individually.
I'm pretty confident my wife would be happy to take out the loan herself, but at some point down the road would I be able to add my name to the loan?
@Rob Bianco I'd suggest that if you are able to get the loan just in your wife's name, you should go with that option.
Also, have you considered another approach in which you can a house, where you and your wife live in and also rent it out as well? I mention this because your credit doesn't have to stellar to get a FHA loan.
Should buy in her name only. If your credit is shaky putting your name on the loan will make it have a higher rate of interest. Can always add your name to the deed after closing.
There is more to this than just getting the loan in your wife's name/credit.
Most long term, buy and hold investors/brokers will only work with an entity, so you'll have to set up an LLC. You should set up an LLC with her as the sole member (you can get added to the articles or organization later). If you add yourself as a minority member, you may be required to have your credit introduced to the situation. Some lenders won't care and others will; depends on the lender.
You should get a good mortgage broker to explain the best way to structure the loan BEFORE you put in a contract.
My two cents. Hope it gives you some guidance.
How many properties are you planning on buying?
Fannie/Freddie will only allow you to have 10 property loans per person. If you and your wife were on the loans separately, you’d be able to end up with 20 as a couple. I recommend having just your wife be on all the property loans until your credit is cleaned up (you can always add your name to the deed later).
After closing, you can change the title anytime to joint tenancy, trust etc. But she is ultimately responsible for the mortgage.