When your parents or grandparents were getting ready to buy their first home as a married couple, it was almost unheard of for a husband and a wife not to own everything together. Today's world is quite different than it was back then, and it's becoming more and more common for spouses to own property independently of one another due to various reasons. Your husband might have already owned a property before you got married, or your credit score isn't perfect and he'll qualify at a better interest rate on his own. Whatever the reason, your name doesn't have to be on your husband's mortgage loan.
Common Law States
All but nine states in the country use the common law system regarding ownership of marital and non-marital property. This system offers spouses freedom from each other to purchase property and acquire debt. If you live in a common law state, your husband can apply for a mortgage loan for a property without using any of your information. As long as he qualifies for the loan -- based on income, credit history, and debt-to-income ratio -- you won't need to be on the mortgage loan or sign anything.
Community Property States
The nine states that have implemented community property laws -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin -- operate differently than common law states. Under community property, assets and debts are shared equally by each spouse. Any property purchased during a marriage is owned equally by both husband and wife, and each is responsible for the mortgage debt, but it's possible to take out a mortgage loan independently. In this situation, you would need to sign documentation stating that you acknowledge that your husband is taking on mortgage debt, but that you are not involved with the transaction.
The Federal Housing Administration offers loans to qualified borrowers with the bonus feature of lower-than-average down payment requirements. FHA loans often require both spouses to take on the mortgage responsibility, regardless of if you live in a common law or community property state, but you don't necessarily have to be on your husband's mortgage. The FHA will refer to you as the "non-borrowing spouse," and requires that your credit score be checked as well. A low score won't negatively affect the approval decision, but your personal debt might contribute to the debt-to-income ratio used to approve or deny the loan if you're in a community property state. If your husband is interested in an FHA loan, it's a good idea to discuss these issues with a loan officer.
The names on the mortgage loan and the names on the property title have two different meanings. If you're a borrower on the loan, you are in debt to the mortgage lender until the loan is paid in full, and you have the responsibility to repay it as agreed on. If your name is listed on the title, you have ownership rights to the property. When you buy a house, the seller signs a deed granting his ownership rights to you. If your husband takes out a mortgage by himself, he will be the only owner shown on the title. It's possible to add your name to the title at a later date by using a quitclaim deed, but this won't make you financially responsible for the mortgage loan.
- Nolo: Marriage & Property Ownership: Who Owns What?
- FHA.com: What Is a 'Non-Purchasing Spouse?'
- Total Mortgage Services: FHA Home Loans with a Non-Purchasing Spouse
- Bills.com: Apply for a Mortgage When a Spouse Has Bad Credit
- Home Loan Artist: Mortgage, Community Property State, and the Non-Purchasing Spouse: What You Need to Know
- US Legal: How Would I Add Someone to the Deed of My Home?
- Bankrate: Understanding Quitclaim, Warranty Deeds On Property
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