Most couples who purchase a home together choose to apply for the loan jointly and take out a joint mortgage. There are some situations, however, when it may be more beneficial to apply for the home loan singly, in only one person’s name rather than both. Should you consider having only one name on the mortgage? Give some thought to these important considerations. Facing Credit Problems When one person has good credit and the other has credit that is not so good, it might be best to have the spouse with better credit apply alone. In most cases mortgage companies will use an averaging system to qualify you for an interest rate, taking both party’s credit scores into consideration. If one person has credit problems it could mean a much higher interest rate and therefore much higher payments on the loan. This can often be avoided by having only one person apply for the loan. You can always refinance later, when the other person’s credit has improved, and apply jointly at that time. Pre-Nuptial Agreements When one person is going into the marriage with a lot more in assets than the other, or when both want to protect their assets, […]
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