When you apply for a loan, your mortgage loan officer may ask if you’re married. While this seems like a simple question, it can have major implications. In this month’s Insights, we discuss purchasing a home as a sole owner versus with a spouse or other cosigner, and how that decision shapes the mortgage process.
If you’re married, the first thing you may want to consider is who will be on the title. Your property’s title report legally states ownership, described in what’s called the vesting of the property, such as “Michael A. Jones and Anne B. Jones, a married couple” or “Michael A. Jones, a married man, as his sole and separate property,” among other vesting options. If you want the title to be in your name only, be sure to check with your lender or local title company to find out if your spouse is required to sign the mortgage. While EverBank doesn’t require it, some states, such as community property states, require spouses to sign the mortgage—even if they aren’t listed on the title.
LEVERAGE A CO-SIGNER’S INCOME, ADD IN THEIR DEBT
Once you’ve determined the guidelines in your state, there are a few factors to consider for mortgage qualification purposes. If you’re adding your spouse or a cosigner to your mortgage application, you reap the benefits of leveraging their added income. However, your lender will also take into account their credit standing and any outstanding debt obligations. Two of the most common credit scores used are FICO® Score and VantageScore. Scores range from 300-850 and while the specific factors each company uses to derive their credit score may differ somewhat, most models are based on the five categories below and the emphasis given to each category. Having a score in a higher range like 700-850 demonstrates to a lender that a borrower has exercised the ability to repay past debts in a timely fashion.