If you are about to tie the knot, then congratulations to you! At this stage, you are likely to be super excited to plan your future- like starting a family and buying a home. Homeownership is the American dream. However, we’d suggest that you don’t rush into getting a home loan without doing the research. It is best to become a first-time homebuyer after the wedding (as a couple) rather than before you get married. One of the top reasons for this is that you can apply for a joint mortgage or an individual mortgage, whichever works best for your situation. Read on to learn more:
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Joint Mortgage vs. Individual Mortgage
Once you are married, you have more loan mortgage options. You can research and evaluate your options to see which one makes a better choice. This will help you make an informed decision. You can apply for an individual or joint mortgage, whichever suits your situation the best.
The factors that will affect your decision include:
Credit Score
You and your partner’s credit scores can help determine the best course of action. For example, you can apply for a joint mortgage if your scores are similar. However, suppose one person has a poor credit score, and the other has a high score.
In that case, the individual in the relationship with a high score should apply for a mortgage individually. This is because if you apply for a mortgage jointly, you may have difficulty qualifying because the lender is likely to use the lower of the two credit scores to determine your eligibility.
On the other hand, you can file a single mortgage loan application if you have a good credit score and your spouse doesn’t. This means that you will not have to wait for your spouse to spend years until they rebuild their credit. You can pursue your dream of becoming a first-time homebuyer.
Income
One of the best things about becoming a first-time homebuyer as a newlywed is that income of both individuals is combined. This means if both (you and your spouse) have stable jobs and income, you can jointly apply for a home loan and qualify for a larger mortgage amount. Furthermore, this will make it easier to pursue your homeownership dream.
Debt-to-Income Ratio
Another factor that can affect your home buying decision is the debt-to-income ratio. You and your partner should have your DTI ratios individually and as a whole. If one of you has less debt and good credit, then it is best to choose sole ownership of property than joint ownership.
For more information contact us. Let us help navigate your choices and make an informed decision.