After saying “I do”, for many newlyweds the next step is to purchase a home together. There are many factors that a lender considers when determining if a couple qualifies for a mortgage, including each spouse’s credit history, income and debt. Here are a few things to know when applying for a mortgage as a couple.
The credit history of each spouse can affect whether or not they will qualify for a mortgage. When applying for a mortgage as a couple, the lender will look at each spouse’s credit report. Some couples may believe that as long as one person has good credit they can still get a low interest rate, but this isn’t always the case. Usually the lower of the two credit scores is used to determine the mortgage rate. To ensure you get the best rate possible, both parties need to maintain good credit before applying for a loan. If one spouse has weak credit, it might make sense for the partner with strong credit to apply for a mortgage loan on their own.
When a married couple applies for a mortgage jointly, the income and financial assets of both spouses is considered by the lender. If both spouses have a stable income, this can significantly increase their purchasing power and strengthen the mortgage application. If a couple uses their combined income, they will typically qualify for a higher mortgage amount than applying as a sole borrower.
When a couple applies for a loan jointly, it can increase their purchasing power, but a joint mortgage also requires that they combine their debt obligations. The debt of each spouse is taken into consideration and can affect whether or not the couple will qualify for a mortgage and for what amount. Debt includes […]