If you are a married couple buying a house under one name, there are some pros and cons you should consider. You can buy a house without your partner. In fact, in some cases, there are advantages to buying your home that way.
- Do you or your spouse have bad credit?
- How much income do you have together?
- How much debt do you have?
Make sure you understand how much house you can afford as a couple and an individual but also think about how your credit scores will affect your interest rate for your loan. You will then be able to make an informed decision about how to finance your new home.
Buying a House Without Your Spouse
If you are married, you can buy a house by yourself. Most of the time couples do this because one partner’s credit is bad. However, there are advantages to joint mortgages.
- Greater borrowing power
- Shared responsibility for loan repayment
- Title and deeds will not be joint
You should carefully consider the pros and cons of buying a house under only one partner’s name. Remember that the biggest consideration is that only the mate who takes out the loan will be on the deed and title.1
Spouse on Deed and Title
Your spouse must be on the deed if you apply for a joint mortgage because the mortgage company will require whoever is borrowing money to be on the title and deed. On the other hand, if you get a loan without your partner then only your name will be on the title and deed.
Is It Smart to Buy a House Without Spouse
You can buy a house without your spouse, but do you want to? Here are some things to consider about buying a house without your mate:
- Your partner has a low credit score
- Your spouse doesn’t meet income requirements
- You will probably qualify for a lower loan amount
- You can still use money from joint accounts for underwriting
- Your mortgage company may still look at your mate’s debt
This is a major decision and there may be pros and cons to each possibility. It is important to learn all your options. This likely will be the biggest and most important purchase of your life.2
Your wife can buy a house as a first-time home buyer, but it is usually easier to apply as a couple for one of the first-time homebuyer programs. In addition, there are two important considerations about only your wife applying for the loan:
- Since the loan is only in her name, the mortgage company will insist that the title is only in her name
- If you live in a community property state, then your wife will be responsible for all the debt but only half of the ownership
While it is possible for your wife to qualify for a first-time homebuyer program on her own it may or may not be the best decision for you. Make sure that you speak with a professional that you trust about all your options and the positive and negatives for each possibility.3
Both Spouses on FHA
An FHA loan does not necessarily require both spouses to apply. But in some states, banks will require both partners to sign FHA loan paperwork. In states where both partners must sign:
- To acknowledge that the spouse has no claim on the property
- To acknowledge that the mate is not a borrower
- To determine qualifying rations. The partner’s debt must be considered when determining debt to equity ratios
FHA loan rules dictate that bad credit reports on the non-purchasing spouse can’t be used to deny an FHA mortgage to the borrower. This requirement only applies to first liens. So, for other situations, the non-borrowing mate does not need to sign loan documents. Finally, non-borrowing mates do not get title to the property bought with an FHA home loan once the loan is paid.4
Can a Married Person Get a Mortgage Without Their Spouse?
A married person can get a mortgage without their spouse, but is it a good idea? Whether both spouses should be on the mortgage depends on your financial situation. Here are a few basic questions you should ask to help you make a good decision.
- What are both of your credit scores?
- What is your combined debt-to-income ratio?
- Which credit score is higher?
Answering these questions will help you get a clearer picture of your credit situation. It will help you decide if one mate should apply for the mortgage or if it is better for both of you to apply jointly.5
Applying for a Mortgage Without Your Spouse
Should you apply for a mortgage without your spouse? It depends on your financial situation whether it is better for you to apply for a mortgage jointly. Here are some guidelines which may help.
- If you both have significant income
- If you both have similar credit scores
One spouse having bad credit is the main reason not to file for a mortgage jointly. If you have similar credit you will be able to get a higher loan, because banks will consider your combined income. In most cases, it is better to apply for your mortgage together.5
Whose Credit Score is Used When Buying a House?
When you apply for a mortgage, your lender looks at everyone applying for a loan. If you apply jointly, then the bank looks at both credit scores. On the other hand, if you apply without your spouse, then they look at only your score.
One Spouse Has Bad Credit
The best reason to not include your spouse on the mortgage is if your partner has bad credit. Credit problems can:
- Convince your lender not to accept your application
- Significantly increase the interest rate for the loan
However, weigh any credit problems against your spouse’s income, assets, and debt. These other factors may be just as important.
Why Does a Non-Borrowing Spouse Have to Sign the Mortgage?
Why your spouse has to sign the mortgage even if they are not a borrower has to do with the difference between a promissory note and a mortgage. They do not sign the note, because they are not a borrower. Banks require both to sign the mortgage, however, because as a married couple they have a claim to the ownership of the home. The bank wants to ensure that its ownership position trumps your spouse’s claim.
Drawbacks for a Married Couple Buying a House Under One Name
There are drawbacks for a married couple buying a house under one name. You should think about these before you decide.
- Your partner can borrow against the equity without your consent or even knowledge
- Your mate can sell the property without your consent
- Your spouse can bequeath the property to someone else
While there are advantages in some cases, there are also considerable disadvantages to not signing a joint mortgage if you are married. If you are the mate who is not on the mortgage or title, then you have very little rights to the property.6