“I’m considering applying for a conventional loan. I have excellent credit, but my husband does not. Can I apply for the loan on my own?”
This question comes up quite a lot, especially with newly married couples that come into their marriage with different financial styles. You can always apply for a mortgage on your own, but there are a couple items to consider:
- Can you qualify on your own? If you’re the only one on the loan, then that means we only use your credit score and your income. We cannot consider your spouse’s income without considering his or her credit score and debt too.
- If you need to get an FHA loan for some reason (usually because of limited down payment funds), then you can elect to not have your spouse on the loan, but we still have to pull their credit and count their debt against your income. This is only applicable with FHA-financing. In addition, if your spouse had a foreclosure or short sale the past couple of years, you will not get a loan.
In qualifying for a rate (and the loan itself), the lender will consider the lowest middle FICO score of all borrowers. The lower the credit score, the higher the interest rate. There certainly are times when it’s beneficial for just one spouse to be on the loan, but the main question is if they can qualify on their own. And no matter what, this should be a reminder that maintaining a good credit score is imperative for saving money in the long run.
