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Qualify for A New Home Loan as Newlyweds

01.07.2022 | Category: Homebuying

The wedding industry has come back from the pandemic in a big way after millions of couples postponed their wedding plans. While planning for the big day might be filled with exciting moments you'll always remember, it's important to consider all the important milestones you and your spouse will reach together, like buying a home.

Your first home purchase maybe the most important financial decision you'll make together. While it's common for married couples to share similar financial goals and responsibilities, there are many individual considerations that should be discussed.

We'll go through some of the most common factors that impact your home mortgage application and how best to secure approval as a newly married couple.

Consider Credit Worthiness as a Couple

If you and your spouse both plan to be co-signers on the mortgage loan, then each of your credit scores will be considered when applying for a home mortgage loan. This means that how you manage credit as well as the amount of debt each person has will be included on a mortgage application.

Be sure you and your spouse are on the same page when it comes to these important factors of creditworthiness:

  • Credit score: If you or your spouse has a credit score that is significantly lower than the other, you may want to consider working toward improving the lower score together.
  • Income: While a married couple can use both spouses' incomes when applying for a home mortgage, it's still important to be realistic about how much home you can afford between other monthly payments, and your estimated budget.
  • Debt-to-income ratio: your debt-to-income ratio is the amount of your current debt divided by how much income you earn each month. If one spouse is carrying a large amount of debt, for example a high balance student loan, it could impact your mortgage eligibility and the interest rates you qualify for.

Know When to Apply Without Your Spouse

In some instances, you may choose to keep your spouse's name off the home mortgage loan. Perhaps your spouse had to file for bankruptcy in the last 10 years or is paying off high interest credit card debt. Applying for a loan without your spouse is a viable option if one of you has a strong credit history, consistent income and stable finances and can qualify for a better loan package.

Another scenario in which you might consider applying for a home mortgage loan without your spouse, is if your spouse owns his or her own business. If your spouse is a freelancer or owns their own business, having the mortgage loan in the other spouse's name could protect your assets should the business endure financial hardships.

Be sure to check with your loan officer to ensure that the loan you're applying for will allow you to leave your spouse off the mortgage. If you're applying for an FHA or VA loan, often times your spouse is in debt and credit history will still be considered during the loan application process.

Set The Same or Similar Long-Term Goals

Whether you decide to apply for the mortgage loan together or separate, it’s important to have a serious discussion about your long-term goals as a newlywed.

Be sure you and your spouse are on the same page when it comes to location, size and even type of home you’re considering before you apply for pre-approval or start working with a reputable real estate agent.

Even discussions around children, careers and spending habits should be discussed long before you’re in the thick of the home buying process to be sure you and your spouse are set up for a lifetime of happiness under one roof.

The Key to Happiness

Financial woes don’t have to be the source of friction between you and your new partner. Open communication and honest conversation can help alleviate any awkward discussion or challenges while home buying.

Remember, buying a home is one of the best ways to earn generational wealth for you and your newly minted family. Like your wedding day, it should be a moment filled with happiness, excitement and hope.

Buying a home is not something you need to rush into, and when you’re ready, a Mutual of Omaha Mortgage loan officer is ready to help you make the walk down the home ownership aisle as smooth as possible.

Get pre-approved or start your home loan application today!

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