Consider Applying for an Individual Mortgage If Your Spouse Has Loan Problems
When you are married, buying a home is usually a joint process with your spouse. But when it comes to getting a mortgage, sometimes it only makes sense to apply for one of you.
If your spouse has credit problems, be it a low score or a stolen identity, you might be better off applying for your mortgage alone. This can boost your grade or simply increase your chances of being approved. Magnify Money explains how it works:
What worries the bank the most is the lowest credit rating, mainly focusing on the very credit problems that you wanted to hide. Lack of credit can do as much damage to your mortgage application as bad credit … the same goes for high credit utilization or high debt-to-income ratios. High utilization of credit is considered to be using 20% or more of the available credit, for example using 20% or more of the credit card limits. A high debt-to-income ratio is when your debt payments are more than 40% – 50% of your income. Banks have maximum requirements on the use of the loan and the debt-to-income ratio for approving a mortgage application …
So if your spouse has any loan problems, you might consider leaving him or her out of the application. That is, unless you need additional income to qualify. When you apply, you usually need two-year W2 documents, tax returns, and bank statements. If one of you has been out of work in the past two years, you may need to apply for the other, despite your credit problems.
There are a few things to keep in mind when applying for a solo. First, you can still add your spouse to the document if only one of you is applying for a mortgage. Also, according to Quicken Loans , keep in mind that you may be approved for a lower loan amount since you are applying with one income. They add that having a joint bank account with your spouse shouldn’t matter in the approval process. Finally, if you live in a public domain, the bank can check your spouse’s debts even if he or she does not apply for a loan with you.
Magnify Money has more information on how this process works, so be sure to check out their full post at the link below.
When To Apply For A Mortgage Without A Spouse | Increase money