Mortgage House Solutions For Newly Married Couples

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Marriage is one of the most exciting and memorable moments in life. This is high time for you to make so many decisions along with your partner. Many couples take a step towards their very own house. Obviously, it is very important to decide upon the location and time, but there are many more things during your home-buying journey that you should consider.

Buying your first home as a couple is too exciting. On the same hand, it is your first major financial decision with your spouse. And you need to be responsible and should take every step carefully.

It is very common for married couples to share their financial responsibilities. Couples very often look for a suitable mortgage plan to buy a house for them.

Understanding Mortgage House Solution For Couples

If you are applying for a mortgage as a couple, then both of your incomes can be used. It also includes the credit scores and amount of debt each person has.

However, if you are planning to apply for a mortgage on your own, then you will only need to depend upon your financial history, income and credit score. 

Let’s quickly understand some factors that can create an impact on your mortgage application and mortgage amount.

Income

If you are using a combined income of both spouses, then you can expect a larger mortgage.

Credit Score

The most happening situation is when you and your spouse both have a good credit score. In case your spouse has a significantly lower credit score than yours. Then you may face some difficulty qualifying for a mortgage. When applied as a couple, the lender will determine your eligibility based on the lower of the two credit scores.

Debt To Income Ratio

The amount of your ongoing debt is divided by the pre-tax money you are earning monthly to calculate the debt to income ratio. For instance, if one spouse is carrying a larger debt, then you can face difficulty while being eligible for a handsome mortgage amount.

Combined Mortgage Or Single Owner?

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According to a survey report concluded by Dissertation Assistance, “Usually married couples apply for a combined mortgage. However, sometimes it can make more sense to have only one name on your mortgage application.”

For instance, if there is a huge credit score difference and your spouse has a poor credit score, you may not be eligible for a mortgage with your spouse as a co-borrower. In such situations, you should go for a single owner mortgage. Getting a mortgage on your own means only your name will be on the property paper, and you are responsible for paying back the loan. However, in some states, even if you are applying for a single mortgage, your spouse still needs to sign the mortgage.

Well, whether you are applying for a combined mortgage or not, it is essential to have a better understanding on both sides. It is very common that spouses are unaware of each other’s financial histories and can have a diverse spending nature. Depending upon your personal situation, you have to make a decision.

Advantages Of Applying For A Joint Mortgage

Since there is an opportunity to buy a house together, I recommend you to go for it if you do not have the worst condition which I have discussed previously. There are numerous benefits of applying for a combined mortgage.

High Credit Score

If you both have a balanced credit score, then it will be considered altogether when you are applying for a joint mortgage. Hence your credit score will be higher, and you can get a better amount. 

Less Waiting Time

If you are applying for a joint mortgage and one spouse has a low credit score, then you will not have to wait for the other to rebuild the credit. You can still apply.

Living In A Community Property State

As per research conducted by CrowdWriter.com, “Living as a community property state requires both the spouse’s name to be included on the mortgage. So, it will be beneficial for you if you have equal ownership and responsibility for the property.”

Some Simple Tips For Mortgage House Solutions

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Of course, it is fun and joy to have your first home together. This is really an exciting moment. However, you need to be very careful while choosing a mortgage plan. Consider your present and future decision and then finalize the mortgage. The below steps or tips can help you get the best mortgage for both of you.

  1. Have A Clear And Honest Conversation

Newlywed couples often know about each other’s interests, likes, dislikes, nature, habits, etc. But finances may not be the topic discussed between you guys thoroughly. It is very important to overview your financial conditions as a couple before visiting a lender.

  1. Understand Some Factors And Important Terms

It is essential to get familiar with the following factors for mortgage house solutions.

  1. Credit Score

Your credit score should be above 720 if you want a better mortgage solution. Or else, your lender will ask for higher interest, and you will have to pay more monthly. You both should check your credit score with FICO so that you can understand where you stand.

  1. Monthly Income

Your joint income will be the main factor in your mortgage.

  1. Financial History & Depts

While applying for the mortgage, determine your debt to income ratio. Younger couples usually have a pending student loan which causes problems with their application. Lenders usually prefer a DTI of 36% or lower.

  1. Future Goals

Consider your future plans before you apply for a mortgage. You both need to be on the same page. If you are planning a career shift, move within 8-10 years, live on one income after having children, you shall have a discussion on it and analyze the impact of your plans on your mortgage.

3. Get Advice From Home Lenders

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After you have completely overviewed your financial status, this is high time to meet a home lending advisor. Discuss whether you should apply for a joint or single-owner mortgage. They can also come up with a solution you were not previously aware of. So, it is good to have a word with some experienced lending advisors.

4. Pre-Qualification

Although it is not a primary requirement, it is as important as understanding the difference between thesis and dissertation for a student. Getting prequalified improves your chances of a mortgage and narrows down your choices. It is an indication to the seller that you are serious about buying a house, so you will be treated in a much better way. It will help you understand your affordability towards a particular house and what your options can be. 

While Summing It Up…

Before you apply for a mortgage, it is important to have a conversation with your spouse, get to know about the financial history of each other and be on the same page for your future plans.

Calculate your credit score debt to income ratio and get some advice along with pre-qualifications. All these things will help you with better mortgage house solutions.

Author Bio

Stella Lincoln is currently working as an Editor at Assignment Assistance UK. She loves to help students with their academic careers and future plans. Stella often blogs at Educator House and is a regular reader at Forbes. She is a travel lover and enjoys exploring the beauty of nature.