When Should You Get a Mortgage Without Your Spouse?

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If you are married and want to buy a house with your spouse, chances are good you'll apply jointly for a mortgage. When you apply for a shared loan, lenders will consider both of your incomes so you may be able to get approved to borrow a larger amount of money. You'll also both be legally responsible for repaying the debt, so it will be a shared financial obligation you can work on together.

But while it often makes sense to get a home loan with your spouse, that's not necessarily the right choice in every situation. In fact, there are a few different circumstances where you may be better off applying for a loan on your own and not naming your spouse as a co-borrower when requesting to borrow. Here are two of them.

1. If your spouse has bad credit

Your credit score is one of the most important factors that determines if you will be able to qualify for a home loan and if you will get a competitive rate from lenders. If you have stellar credit but your spouse has a low score or no score, then you may want to apply for a loan on your own. That way, your spouse's low score won't send up red flags that could make it more difficult to get the best possible rate.

2. If your spouse has a lot of debt

If your spouse has a lot of debt, this can also affect your ability to get approved for a loan. That's because lenders take your debt-to-income ratio into account. This means they look at your total debt, relative to your total income, in order to determine how much to lend and what rate to offer you.

Ideally, your debt-to-income ratio will be 36% or lower to get the most competitive rates. That includes all debt including your new monthly housing payment after you get your mortgage. Unfortunately, if your spouse owes a lot of money, it could lead to a higher ratio that affects your ability to borrow -- especially if they have a low income or no income at all.

You'll need to consider how much your partner earns, relative to their debt, to decide if it makes sense not to include them as a co-borrower. If they have large loan payments but make a lot of money, then it may still be beneficial to include them -- but look at your debt-to-income ratio both independently and together when deciding what's likely to lead to your best chance of loan approval.

Other considerations when getting a mortgage without your spouse

If you're getting a mortgage without your spouse, you'll also need to consider other complex financial issues this can raise. For example, will you want to name your spouse as a co-owner on the property even if they aren't a co-borrower on the loan? And you'll also need to consider what the rules would be if you divorced, as the rights and obligations of each spouse can be affected by whether you live in a community property state.

Talking with a lawyer or financial advisor could be beneficial because this is a big decision with long-term consequences for your finances. But, the bottom line is, it does sometimes make sense to get a mortgage on your own even if you're married -- you just need to make sure you think the decision through carefully before you act.

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