Long-term relationships are a big commitment—whether you’re deciding to get married or signing the paperwork for a 30-year mortgage. These decisions become even more important for potential homebuyers, as money and marriage now help determine the loan that best fits your needs. No matter what your relationship status is at the moment, there is always a mortgage option for you.
- Single: Applying for a mortgage when you’re single can be a great decision because you have the freedom to make your own choices. If you fall under this relationship status and would like to buy a home, there is no need to be concerned about your income level or credit score— there’s an easy way to ensure that you get the loan you want! Look into getting a co-signer for the loan. This will make you less of a risk to the lender. It’s also important to note that if you can’t make a payment, your co-signer’s credit will be affected, so make sure that you will be able to make every payment on time.
- Committed Relationship: Today, two legally single individuals have the ability to take out a mortgage together. Although this type of mortgage loan requires two individual applications, the two are ultimately combined to determine which applicant is the “borrower” or the “co-borrower”. The “borrower” usually refers to the individual with the higher income. The only downside to using this strategy is that your lender will apply the lower of the two credit scores to the overall application—so make sure your partner has a qualifying score!
- Married: Being married may mean that you have a double-income household and lower debt-to-income ratio. When you apply as a married couple, remember that the income, debt, and credit score of both spouses is taken into consideration. If one spouse has little-to-no income and a low credit score, you may consider including only one spouse on the application. As a married couple, you have the ability to choose if you’d like to apply jointly or apply for the loan under one spouse’s name. This provides married borrowers with several alternate options.
- Separated: Separating from your partner does not mean that you can’t get approved for a new loan, but it may be a little more complicated. According to Casey Fleming, author of The Loan Guide, couples that are in the process of separating usually have both names on the title of the property. In this case, “then both must agree to the mortgage in order to [change] it. One owner may not encumber the property without the consent of the owner.” If the loan is uncontested by either borrower, then you are ready to take out a new mortgage!
- Divorced: The simplest way to get approved for a mortgage if you are getting divorced is to sell your home prior to submitting new paperwork. This strategy has many benefits, such as preventing both borrowers from paying two mortgages and thus saving you money, and maintaining your credit score, as dividing joint property can damage both of the homeowners’ credit.
- Recently Widowed: If you are recently widowed, many lenders will focus on what your income may look like in the future, such as social security payments and death benefits. It’s particularly important to highlight which of these benefits will continue for at least three years after your loan is approved.
Borrowers of every relationship status have the ability to get approved for the loan they desire. For more information about housing finance options, contact one of our mortgage lenders today.
