Buying a House Without Your Spouse on the Mortgage
A lot has to be considered when preparing to purchase a house. But for couples, deciding whether to have both names on the home loan or have one spouse is a big decision to make. Maybe having one spouse on the home loan might be a good option.
Is it possible to leave out your spouse when getting a mortgage?
Yes, a couple can choose to have only one of their names on their mortgage application. There are things you should understand about purchasing a house with one spouse on the mortgage.
Reasons for leaving out a spouse’s name on a mortgage
A low credit score of a spouse
Mortgage companies pay attention to the lowest credit score. So it would be best if you leave out your spouse if they have a credit score that would prevent you from being given the best rates.
Inability to meet income requirements by a spouse
If one spouse does not meet the requirements, they may not have two years on tax returns. Then it is okay to leave them out of this mortgage. If you have a self-employed spouse, they need two years of business returns and if they do not qualify, leave them off the loan.
What you should know about not including a spouse on the mortgage
Your qualifying loan amount will be smaller
Getting loans together as a couple qualifies for larger loans. If your household is a two-income home, leaving your spouse off the loan means that the lender cannot consider their income when deciding the amount you qualify to get. You, therefore, have to go for a cheaper home.
It is okay to have joint bank accounts
If you qualify using a single income, having a joint bank account with your wife will not affect underwriting. As long as you are on the joint account, you both can access all the funds by law.
The mortgage company will check the debts of your spouse
The mortgage company will check your debt-to-income ratio, which is the amount of your income that goes into servicing debts. Your DTI determines a lot on your home loan. If your spouse has so much debt, do not include them on the mortgage to lower your DTI ratio.
FAQs for mortgage application without one spouse
Can the name of a spouse not be included in the title?
You are at liberty to not include a spouse’s name on the house’s title if you stay in a common-law state.
Can the title have both couples and the mortgage be under one spouse?
Putting both names on the title does not affect the mortgage. The responsibility of the loan is on whomever their name is on the mortgage.
Can the name of a spouse be added to a title later?
Adding a spouse’s name can be done using a quitclaim deed to pass over property ownership to people, especially family members, or add and remove a spouse’s name after a divorce.
Taking a mortgage without your spouse’s name on it could be the best option for both of you to get the home you want. It could increase the chances of you getting good home loan terms.