A mortgage loan can't be modified or changed once its established. If you want to add your spouse to your existing mortgage, you would need to refinance the loan in both names. The new loan replaces the current loan. The terms may also change, including the interest rate, loan duration and payoff date. Once you refinance in both names, you and your spouse will be equally responsible for the mortgage.
You and your spouse will need to qualify for the mortgage if you want to refinance. You aren't guaranteed approval. If your spouse has poor credit, it could result in a higher interest rate. On the other hand, if your spouse has a higher credit score than you, you may qualify for a lower interest rate. Before shopping around for interest rates, check both credit reports with each of the major credit bureaus at annualcreditreport.com.
Income and assets for both borrowers are taken into consideration when reviewing your application. You'll both need to submit certain documents, including:
- Recent paycheck stubs
- W-2 forms
- Tax returns for the past two years
- Proof of unearned income, such as Social Security benefit statements
- Bank statements for several months
- Proof of any assets, such as stocks, bonds, CDs, and retirement accounts
The mortgage must currently be in good standing. You can't be behind loan payments or be in foreclosure if you want to refinance. The home must have some equity, generally 20 percent for a conventional loan. If you owe more than the home is worth, it may be difficult to qualify.
Choosing a Lender
Apply for a new loan with your current lender or shop around for a new one. Even if you stick with your current lender, they'll reevaluate your eligibility along with your spouse. Compare interest rates and closing costs among banks, credit unions and mortgage brokers. Since multiple hard credit inquiries will affect your score, try to keep the loan shopping confined to a 30-day span. Credit scoring models lump inquiries together to lessen the impact when they detect you're comparing loans.
After deciding on a lender, you can proceed with the application process. Once your application is approved, a closing is scheduled to finalize all the documents. You and your spouse must both be present at the closing. The lender's representative or title company, closing agent and notary public will likely be present at the closing. You'll present proof of insurance, payment for the closing costs and any other required documents. You and your spouse must each sign all the mortgage documents. The escrow agent requests funding from the new lender to pay off the current loan. Once the funds are received, the loan is paid.