Advice in applying for a mortgage

January 15, 2008 9:06 PM

I'm applying for a mortgage, my wife is European and has debt in a foreign country but has been living here for 3 years and has a green card and a short credit history. If I don't report her foreign debt in our financial disclosures when applying for the mortgage will the bank here be able to find out? will they look?
posted by anonymous to work & money (8 comments total)

If you are applying for the mortgage in your name only, her debt will not come to light. But if both of your names are on the application, chances are it will be found. It is always better to be up front with your lender.
posted by JujuB at 9:15 PM on January 15

if your lender is federally insured, it's against the law to make misrepresentations on your loan app.
posted by bruce at 9:20 PM on January 15 [1 favorite]

My husband, who moved here from a european country, bought a house with me earlier this year. None of his international credit history had any bearing on our loan application. They didn't seem interested in that information at all. It's a shame as he owned his own home there and had a terrific track record. It would have helped us a lot to have that information considered. However, as far as I know, that stuff wont show up on her usa credit history. Perhaps a mortgage specialist will chime in and tell you for sure!
posted by theantikitty at 9:21 PM on January 15

We just bought a house in Australia. I'm American, and I have a pretty significant debt in the US. (Student loans suck.) I brought it up with our mortgage broker the very first time we met him, and he basically said that as far Australian banks were concerned, it didn't exist. I couldn't believe it. I'm not sure if it's always been like that, or if it's just a side effect of this current "throw hundreds of thousands of dollars at anybody with a full-time job" subprime mortgage madness thing. But at any rate, we didn't have to report it and they definitely didn't check.
posted by web-goddess at 9:32 PM on January 15

It actually may depend somewhat on which country she's from. So tell us and I can fill you in!
posted by Dee Xtrovert at 1:57 AM on January 16

I'm an American with a typical (~18k USD) amount of Stafford student loans and I'm currently living in Canada. I'm not sure if this would extend to a mortgage application, but I know my student loans do not appear on my Canadian credit report. I opened a new bank account a few months ago here in Canada and in doing so, got a copy of my credit report. The only line of credit indicated was my credit card from my previous Canadian bank.

As the above have said, I'd suggest casually mentioning it, but it seems like most places don't care about foreign credit history.
posted by Nelsormensch at 5:54 AM on January 16

Foreign debt does not show up with the credit reporting agencies in the U.S. That doesn't mean the lender is disinterested about said debt. If you fail to mention the debt, you are in violation of federal law. If you mention it and your loan officer fails to report it on the application but you sign it anyway, you are in violation of federal law.

When you sign your name on the 1003 its your ass so don't let a mortgage broker or loan officer tell you it doesn't matter.
posted by curlyelk at 7:50 AM on January 16

I am a Canadian living in the USA on a green card. I bought a house at the beginning of 2007. I have Canadian student loans and a decent Canadian credit rating. I know for a fact that your Canadian (or other country) credit rating has no bearing on your American credit. How I know this is I tried to use my good Canadian credit when setting up my American bank accounts and credit cards and the bank told me that I could not use it.

The bank even went as far as to tell me that there is a law in place that does not allow American financial institutions to gain access to foreign credit history.

So in my opinion you do not need to disclose any of your foreign financial history.
posted by birdlips at 9:02 AM on January 16