Mortgage Advice

Applying for a Joint Mortgage With Your Spouse: 3 Factors to Consider

February 23, 2017

Applying for a joint mortgage is a big investment for couples – both in time and money. The approval process for joint applicants can sometimes be complicated, and unforeseen obstacles could potentially cause the loan to be revised or rejected. As Michigan’s mortgage lending expert, we keep the best interests of our customers top of mind. To help you better plan for a joint mortgage application, here are three things to consider.

Look at Both Individuals’ Credit Scores
When applying for a joint mortgage, credit is an extremely important factor, especially when it comes to the feasibility of having both names on the loan. Each applicant has their own individual credit report that contains a total of three FICO scores. Mortgage lenders will typically use the middle score of the person with the lowest overall credit score to determine the pre-approved credit limit and interest rate.

Therefore, it’s important to evaluate each of your credit scores, and discuss alternative options if one person has a score that could result in a costlier mortgage. In the event one of the applicants has a low credit score, here are a few tips on increasing your partner’s credit score.

Look at Incomes
It’s helpful to enter the home buying process knowing how much house you can afford. If one applicant has a lower credit score, you may want to consider the feasibility of purchasing a home with one person’s income alone. For example, let’s say your credit isn’t on par with where you’d like it to be, but your spouse has a great credit history and earns enough money to buy a house on their own. In this scenario, it may make sense to talk with your lender about the different options available to you.

Look at Debt
If you’re planning on applying for a joint mortgage with your spouse, a discussion must be had about how much debt each applicant brings to the table. Even if both parties have excellent credit and enough income, a significant amount of debt from one side could negate some of the better mortgage options, and cause them to be left off the mortgage. Student loans are one of the most common types of debt people are faced with. If this sounds like your situation, check out our blog post on how student loans affect a mortgage application.

No matter your financial scenario, an experienced Ross Mortgage loan officer can consult with you to determine your eligibility, and create a plan of action based on your homeownership goals. Click here to send us a message and get in touch with one of our mortgage experts.