It is 2017 and there is no real order to the way that couples do things any longer. Whether you get married and buy a house, or live together most people do things in whatever order they need to. What most do not consider is how diverse applying for a mortgage is as a single person, partners or when you are married. They all vary, and we are here to break them down for you.
For Married:
If you are married and applying for a mortgage with your partner, there are a couple things you need to be familiar with. Being married beyond doubt makes the process easier, but it comes with its own set of interruptions. Being married may help you meet the requirements for better loan terms, as they will take the income that you both earn. It helps your debt-to-income ratio as it computations two incomes against the debt you owe. No matter your state of affairs or relationship status, a mortgage is still reliant on income, debt, and your credit score.
Something significant to note is that when you apply for a mortgage as a couple, the lender uses the lower of the two credit scores. So if you have awful credit, but your spouse doesn’t it may make more sense to leave the person with lower credit off of the mortgage application.
If you still want to apply together, you may face higher interest rates. You should consider saving up a larger down payment, as this will reason you to finance less of the property, perhaps inspiring better rates. You could at all time look at a less expensive home, or pick higher interest rates and monthly payments.
Single:
If you are single you can make whatever financial choices, you want. You don’t have to take someone else’s needs and wants into the thought and you don’t have to concern about their financial history and credit score when you are applying for a house. Your relationship status won’t be held against you by a lender, and dependent on your finances it could profit you. The one con to applying for a mortgage as a single person is that you do not have the benefit of a double-income domestic to help with your mortgage rates. If you, as a single person, make a high income and have little to not debt in your name, you could be in a good position to purchase a home on your own.
You also have the choice as a single person, to buy a home with a co-signer. This makes some mortgage companies more probable to lend to you, as the co-signer settlers to take over mortgage payments if you fail to do so. Co-signing can create a vast difference in a single home purchase, but it can be unsafe. If you do run into worry on your payments, it puts pressure on your co-signer, as they are on the hook financially.
Committed Relationship:
Being married is not a requirement to borrow money for a home loan. It is better to consider this as it will add more difficulty and charge to a relationship. If your relationship ever ended, it is important to consider that it is harder to break up a jointly owned property, because no one is required to go over legal property division. Lenders will thankfully loan money to unmarried couples, and most of the similar rules apply; you can apply using combined incomes, but the lowest credit score will still be used.
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