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When Should You Get a Mortgage Without Your Spouse? – The Motley Fool

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Surprisingly, there are times when it could pay to get a mortg…….

Image source: Getty Images

Surprisingly, there are times when it could pay to get a mortgage on your own.

Key points

  • It’s common for married couples to be co-borrowers when purchasing a property.
  • This doesn’t always make sense in every circumstance.
  • You may want to borrow without your spouse if they have bad credit or a lot of debt.

If you are married and want to buy a house with your spouse, chances are good you’ll apply jointly for a mortgage. When you apply for a shared loan, lenders will consider both of your incomes so you may be able to get approved to borrow a larger amount of money. You’ll also both be legally responsible for repaying the debt, so it will be a shared financial obligation you can work on together.

But while it often makes sense to get a home loan with your spouse, that’s not necessarily the right choice in every situation. In fact, there are a few different circumstances where you may be better off applying for a loan on your own and not naming your spouse as a co-borrower when requesting to borrow. Here are two of them.

1. If your spouse has bad credit

Your credit score is one of the most important factors that determines if you will be able to qualify for a home loan and if you will get a competitive rate from lenders. If you have stellar credit but your spouse has a low score or no score, then you may want to apply for a loan on your own. That way, your spouse’s low score won’t send up red flags that could make it more difficult to get the best possible rate.

2. If your spouse has a lot of debt

If your spouse has a lot of debt, this can also affect your ability to get approved for a loan. That’s because lenders take your debt-to-income ratio into account. This means they look at your total debt, relative to your total income, in order to determine how much to lend and what rate to offer you.

Ideally, your debt-to-income ratio will be 36% or lower to get the most competitive rates. That includes all debt including your new monthly housing payment after you get your mortgage. Unfortunately, if your spouse owes a lot of money, it could lead to a higher ratio that affects your ability …….


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