Does a Wife Have to Be on a Mortgage Loan?

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When you and your spouse are applying for a mortgage, there are some situations in which it would be best to have only one of you take out the mortgage. It is possible, and sometimes advantageous, for a husband to get a mortgage without his wife signing with him on the loan, but there are some disadvantages to this situation as well.

Advantages

The main reason a husband would get a mortgage without his wife is if her credit score is bad and they do not want the low score to force them into a higher interest rate. If the husband has a good credit score, he can qualify for a better rate alone than they would get jointly. Another good reason for a husband to apply alone is if the couple keeps most of their finances and responsibilities separate. For example, he might be responsible for providing housing, whereas she covers the car expenses and food.

Disadvantages

Leaving the wife off the mortgage will likely result in lower purchasing power than if she were included. This is because part of the mortgage application considers what percent of the borrower's gross income the payments would be. Lenders typically limit mortgage payments to about 25 percent of the borrower's income. Therefore, by leaving the wife's name off the application, and therefore leaving her income out of the calculations, the couple will not be able to afford as big of a house. Plus, the wife will not have the mortgage payment history affect her credit score. If she has bad credit, making on-time payments on the mortgage could help her improve her credit score.

Applying for Mortgage

If only the husband will have his name on the mortgage, he is the only one who applies for the loan. The qualification is based on his income and assets without considering the wife's at all. He will need to provide his W-2 statements and bank account statements. The interest rate will be based on his credit score, so he should focus on making on-time payments and paying off as much credit card debt as possible during the months leading up to the application.

Ownership

Even if the wife's name is not on the mortgage, she can still have joint ownership over the home with her husband. If the married couple lives in a state with community property laws, including Wisconsin, Washington, Idaho, Nevada, California, Arizona, New Mexico, Texas and Louisiana, they own the property jointly, regardless of whose name is on it. In other states, the couple can choose to own the home together by using an interspousal transfer deed to add the wife's name to the deed after the mortgages closes.

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