Being married may or may not help a couple qualify for a mortgage. There are many factors that a lender considers when making this determination, including each spouse’s debt, income and credit history. Marriage will not necessarily increase the likelihood of getting a mortgage if either spouse has a negative credit history or excessive debt. On the other hand, two good incomes, positive credit histories, and only a little debt will help a married couple obtain a mortgage. The lender will consider all these factors when making a determination.
Whether being married will help with getting a mortgage depends on both spouses' incomes, credit histories and debt.
Joint Mortgage Definition
A joint mortgage is a mortgage that two or more people share. It is commonly used by married couples, but unmarried people can obtain a joint mortgage as well. Both spouses are responsible for making payments on the joint mortgage.
This, however, does not necessarily mean that both spouses have ownership rights to the property. Each spouse must be listed on the deed, which is the document that gives ownership rights.
Benefit of Dual Incomes
One of the advantages of a joint mortgage is that the income of both spouses is considered by the lender. Each spouse must have a stable income; otherwise the lender may not allow the couple to claim the unstable income source. The total income amount, along with other factors, is one of the tools used to determine the mortgage amount. Typically, if a married couple uses their combined income, they will qualify for a higher mortgage than applying as a sole borrower.
Spousal Debt Considerations
The debt of each spouse also affects whether the couple will qualify for a mortgage and determines the qualifying amount. A lender will review the debt of a couple to determine how much the couple can afford to borrow. Debt includes credit card debt, student loan payments, car payments and any other monthly debts reflected on the credit report of each spouse.
The lender will calculate the debt-to-income ratio to help it determine the mortgage amount. Therefore, it is important to have a low debt-to-income ratio.
Each Spouse's Creditworthiness
Each spouse’s creditworthiness can affect the ability to qualify for a mortgage. If one spouse has a negative credit history, this may factor into a lender’s decision to approve a mortgage application, and it may determine the interest rate of the mortgage. In this situation, it may be best for only one spouse to apply for the mortgage. However, if both spouses have a positive credit history and are able to meet the other standards, it is a benefit to apply together.
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- What Does Our Credit Score Need to Be As a Married Couple to Qualify for a Home Loan?