When you apply for a mortgage loan, creditors will look at your borrowing history. However, they won't just look at loans you took that out on your own. If your husband took out a home mortgage, it will affect your ability to borrow in the future. Creditors will typically look at your husband's handling of loan payments, as well as how much debt you've taken on as a couple.
Your husband's home loan only affects your credit score if it was a joint loan. This means you co-signed the mortgage agreement and promised to pay off the debt. If your husband signed the mortgage separately and left you out of it, he only promised to pay for the loan out of his income. You are not on the hook for the mortgage payments and it will not affect your credit history. However, your husband's personal loan still pushes up your household debt level.
A well-managed joint mortgage can be a big help for your future loan. If your husband made all the payments on time, it builds up both your credit scores. This is a big plus, especially if your own credit history isn't that strong. However, if your husband didn't handle your mortgage well and missed payments, the joint loan will damage your credit score. These missed payments stay on your credit history for seven years. During this time, it will be harder to take out a future loan as creditors will see you as a riskier candidate.
By taking out a home loan, your husband increased the debt level of your family. This will also make it harder to take out a new mortgage. When you apply for a new loan, creditors also look at the amount of debt you carry compared to your total income. If your monthly debt payments are more than half your income, creditors will be less likely to give you anymore loans. If your husband's home loan pushed you over this debt-to-income maximum, it will be hard to get additional credit until you pay off some of your debts.
A joint home loan gets even trickier after a divorce. A divorce agreement doesn't excuse you from your joint loans, even if your husband is keeping the house. As long as your name is on the mortgage agreement, you are responsible for the mortgage payments. To get out of the loan, the mortgage should be refinanced in your husband's name only.
- Jupiterimages/Photos.com/Getty Images
- Does Having Your Name on a Mortgage Deed Affect Your Credit?
- Can I Build Credit After Bankruptcy With a Co-Signer on a Car Loan?
- Can I Still Get a Mortgage if I Co-Sign for Someone?
- "If My Name Is on a Title But Not on a Loan, Am I Still Responsible for a Foreclosure?"
- Does a New Husband's Former Bankruptcy Affect His New Wife?
- Can You Build Credit Through Co-Signing?
- Does a Credit Card in a Husband's Name Affect the Wife's Credit?
- How Cosigned Loans Affect a Credit Report