Buying a house is an exciting adventure. It can be even more exciting when you have a partner to do it with. Looking for homes with your spouse is a physical manifestation of the life you plan on having together. You’re mapping out your whole future and getting ready to take this next step together. But when you have two people shopping in real estate and looking at home loans, you may have extra questions about who should be the borrower and how to apply for a mortgage.
While it may seem like an unusual question, you may want to ask yourself, “should my spouse be on my mortgage?” At first, you may think, “of course, they’re my partner, we’re in this together.” But there can be ways to get a lower interest rate from your mortgage lender if you file alone. On the flip side, without the help of your spouse, your mortgage rate can rise specifically.
Ultimately, there is no right or wrong answer. Every couple is different and will have different qualifications and pros/cons to including their spouse on the home loan. Whatever gets you the best rate on the type of loan you’re looking for should be the best option for you as homebuyers. Use your best judgment as you explore these areas where applying for a mortgage with your spouse can help or hurt you.
Are you ready to buy a house?
First thing’s first, you need to be sure you and your partner are ready to become homeowners. This is a big step and a big commitment to your future together. Be sure everything is happy and healthy at home. If you’re at all worried, consider marriage counseling to help get your family back on the same page. Whether you’re struggling with intimacy, affection, or personal issues, speaking with a couples counselor can resolve issues and make you a stronger team than ever. Becoming homeowners is a big step, and counseling can help show you if you’re ready for it.
Income Increase
When you’re applying for a mortgage loan, you need to provide proof of income to decide your monthly payment and rate mortgage. Applying for a mortgage on your own will mean you’re only including your income to determine the loan amount. This may mean you can only secure a lower loan and not pursue homes that are actually in your price range. Adding your spouse when you apply with a lender can sometimes double your income and allow you to apply for a higher loan. Experiment with different numbers and use a mortgage rates comparison calculator to figure out how the income ratio can affect you. If filing together leads to a better mortgage at a lower rate, it may be too good of an opportunity to pass up.
Credit Changes
Applying for any conventional loan means the lender will run a credit report. Your credit score determines your loan estimate and the interest rate. Research your credit score, your spouses, and your joint number to decide which filing method will get you the best rate. If your partner has a bad score and yours is great, it may be a good idea to leave them off the mortgage. Just remember, if you apply for a mortgage together, those monthly mortgage payments are both your responsibility, and paying off your new home will affect your credit scores and tie them together for years to come.
Signing the Deed
If you’ve chosen to leave your spouse off the mortgage loan, you may be wondering if they can still be considered a homebuyer. While their name may not be on the mortgage, they can still sign the deed to the home. And if you do sign a mortgage together, it will be expected that both borrowers sign the deed together.
