Responsibility For Loan Repayment
When only one spouse is the borrower on a mortgage, he alone is financially responsible for repaying the loan. If he misses payments or defaults on the loan, it negatively affects his credit score and not his spouse’s. While this holds true legally, married couples might work out an agreement that the non-borrowing spouse does contribute to the monthly payments. It depends on your personal finances and decisions.
Apply For A Mortgage Without Your Spouse
The good news, fortunately, is that just because your name is the only one on the mortgage loan, it doesn’t mean both you and your spouse can’t be listed as the owners of the home. You can still put your spouse’s name on the home’s title even if only your name is on the loan.
You may be wondering, can one person get a mortgage? Can you even buy a home on your own?
A spouse who applies for a mortgage on their own needs enough individual income to qualify for the monthly payment on their own. The lender counts only your income, not your spouse’s when determining your ability to repay. Since your spouse’s income is excluded from the “ability-to-repay” calculation, also known as the debt-to-income ratio, you are likely to need a fairly strong income to qualify individually.
Both Spouses Own The House
- It is generally in the interest of the spouse who owns the house to make sure the taxes, mortgage and house insurance are paid. If these payments are not made, the bank or the city could get a court decision against the spouse who owns the house, and then seize and sell the property.
- The spouse who does not own the house but who lives in it contributes to paying the expenses according to what he or she can afford.
- The spouse responsible for any payments should continue to pay them. For example, imagine that the house belongs only to John, but Irene is also responsible for mortgage payments to the bank. If John does not pay, the bank could go after both Irene and John.
- The spouses should in principle share the house expenses . If one of the spouses refuses or neglects to pay his or her share, the other could pay it and then ask to be reimbursed.
The spouse who makes the payments should keep proof of payment .
- If one of the spouses no longer lives in the house, that spouse can continue to pay his or her share of the expenses and ask for financial compensation from the other spouse for not being allowed to use the house.
The spouses could also agree that the person living in the house pays all of the house expenses, but gives up the right to claim compensation from the other spouse, who has given up the right to live there.
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What Doesnt This Cover
Keep in mind that this still does not cover spouses who were not married to the borrower at the time the loan closed. New individuals who became spouses after the closing of the loan, are still not covered under the existing reverse mortgage. For a person to be considered a spouse, the borrower must consider them a spouse and declare them a spouse when the loan is closed.
In other words, borrowers cannot try to add someone claiming them to be a common law spouse at the time the loan closed but they stated they were unmarried at the time. For newly married spouses, the only way to still ensure that they are covered by the terms of a reverse mortgage if that is your goal, is to obtain a new loan in both your names or with them being a current eligible non-borrowing spouse now at the time you take out the new loan if they are not yet 62 years of age.
When One Spouse Pays Expenses For The Other Spouse
When a couple separates, one spouse might be making payments for the other spouse to avoid losing important property or to prevent damage to his or her credit rating.
The spouse paying can ask to be paid back, no matter the reason. This spouse will generally be refunded, but there is no guarantee. It is important to keep proof of payment .
In addition, since the refund of expenses is not considered urgent, the spouse must wait for the final divorce judgment to learn whether or not the judge will order reimbursement.
However, the spouse paying can ask the judge to make an emergency decision to temporarily settle which spouse is responsible for which expenses.
The spouse paying can also try to reach an agreement with the other spouse before paying an expense.
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What Happens If Your Name Is On The Deed But Not The Mortgage
Sometimes clients getting an uncontested Pennsylvania divorce, whether in Philadelphia, Pittsburgh, or another city, want to change the deed to their home. This can mean adding or removing a name or names. This should be addressed in a . Two questions often come to mind:
1. Who is responsible for making payments on the home if your name is on the deed but not the mortgage? The spouse who signed the mortgage is generally the one responsible for paying the mortgage. This can happen when one only spouse signs the note and mortgage, and both spouses sign the deed. If the mortgagee does not make payments as agreed, then the loan is in default, and the mortgage company can foreclose and sell the property in order to get the money that is owed to them.
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Does My Husband Have To Be On The Va Loan
Does my husband have to be on the VA loan?
This is often a question asked when one spouse has good credit and the other, well, not so good. In fact, if one of the borrowers has bad credit it can derail a VA approval, regardless of the credit score of the other party. But there can be instances where the loan may still be approved when one of the borrowers has bad credit.
If the veteran has good credit but the spouse has bad, try qualifying with just the veteran on the loan and leaving the spouse off the application entirely. There is a bit of additional evaluation in such an instance but it can be done. The qualifying veteran must be able to afford not just her monthly debts but any monthly obligations the other spouse might have in his own name.
There are other issues based upon whether or not the property resides in a community property state and the spouse not on the loan will still be listed on title, but yes, one spouse doesnt have to be on the loan application as long as the veteran can qualify individually.
COMPARE RATES FROM MULTIPLE
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Why Youd Leave Your Spouse Off The Title
There are a few reasons it might make sense to leave your spouse off the title:
- If youre buying the house with money you had before the marriage, keeping your spouse off the title is one way to keep your finances separate.
- Estate planning: If you have sole ownership of the property, you can leave it to whoever you want. This might make sense if you have children from a previous marriage, for example.
- Protecting your assets: Does your spouse have a poor credit history? If your partner has defaulted on loans in the past, leaving them off the title could help you protect your home. This would prevent any previous lenders who have judgments against your spouse from taking the home as collateral.
Why Buy A House Without Your Spouse
There are a number of reasons that buying a house without a partner or spouse may be worthwhile.
For example, let’s say your credit scores are excellent. Your spouse’s however, are not. Does this make it a challenge to qualify for a home loan with the lowest mortgage rates and fees?
In a word? Yes.
If your spouse’s is under 620, you may want to apply for a mortgage in your name only. If you don’t, mortgage lenders may either saddle you with higher mortgage rates, higher fees, or even deny your mortgage application.
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What Happens To Mortgage When You Split Up
When you split up nothing really happens to the mortgage. You will need to continue making your monthly mortgage repayments as usual.
You should decide between you and your ex on how much you will each contribute. If it is a joint mortgage or you have anything in writing stating how much you will contribute to the mortgage should you split or in any circumstances then you will have to inform your ex that they need to continue making the mortgage payments as agreed.
If Only Your Spouse Is On The Mortgage Are You Automatically On The Title
First, by way of definition, a mortgage is a security interest given to a lender as collateral for a loan, whereas title evidences ones ownership of a property by means of an instrument called a Deed. You cannot give a mortgage unless you are on the title. So, if only your spouse is on a mortgage, you are not necessarily on the title, automatically or otherwise. You may, however, be on the title, but not on the loan as youll see below.
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Joint Bank Accounts Are Just Fine
So, what if youre only using one income to qualify, but you have a joint bank account with your spouse? According to Villasenor, this doesnt really impact underwriting.
As long as our client is on the account and its a joint account, its determined that they are both legally allowed to access all of the funds, she says.
What If Only Your Spouse Is On The Mortgage Or Title
Is there anything more romantic than purchasing a home together? Maybe there is, but certainly a goal of many couples is to buy a home together. For any number of reasons, only one of you may end up on the mortgage, or on the title, for that matter. If thats the case for you, what do you need to know?
I asked Keith A. Schuman, a real estate attorney in New York City and an expert in residential law at Schuman and Associates, to break down for us what it means if you arent on the mortgage or on the deed to the property. Keith is a graduate of the University of Pennsylvania and Cornell University Law School and has extensive experience in transactional real estate work. He has represented developers, owners, operators, purchasers and sellers of commercial and residential properties throughout the United States. He has also represented landlords and tenants in commercial lease transactions, borrowers and lending institutions in commercial and residential re-financings, boards of cooperative buildings, and sponsors in the development of residential cooperatives.
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Buying Homes In Community Property States
In California, for example, you are often considered a single entity when it comes to acquiring major debts or liabilities, such as taxes or a mortgage. In order to avoid being held responsible for your spouse’s debt, you may have to file taxes separately rather than jointly, or apply for a mortgage alone, rather than jointly.
States vary when it comes to community-property laws. Community-property laws make any asset acquired within the marriage equal property of both spouses. The same goes with debts acquired within the marriage in a community-property state.
Community-property laws vary by state. There are only 13 states which are considered community-property states and the laws are more complicated than those of common-law states.
When One Of You Wants To Keep The House
If one of you wishes to remain in the home while the other moves out, the ideal solution is for that person to buy the other spouse out and take the sole legal title to the property. However, for this to work, the remaining person would have to have the mortgage transferred into her sole name, which means she would have to qualify for the mortgage loan on her own. This is not financially possible for many couples. The spouse who no longer lives in the home may agree to help out financially if the residing spouse cant afford to pay all the household expenses alone. In that case, the non-residing spouse may make the mortgage payments and pay toward other expenses like property taxes and utility bills. Even if you don’t live in the house but continue to help out with the mortgage until the divorce, get a judge to sign off on a separation agreement as quickly as possible to protect your interests. All debts incurred before a separation agreement is entered into become the debts of both parties.
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Can I Add My Spouses Name To The Title At A Later Time
If you leave your spouses name off the title but want to put it on at a later point, you can do so using a quitclaim deed. A quitclaim deed is used to transfer property between individuals, and is typically used to pass ownership to family members, add a spouse to the title or even remove them from it after a divorce.
How Bad Credit May Affect Your Application
Getting a mortgage with bad credit can be an issue if youre married and apply in just your name. Here are some of the main issues and considerations to be aware of
- If you or your spouse have a bad credit rating, a single mortgage may be worthwhile although, depending on the severity of the issue, lenders may need a higher deposit.
- Its still worth considering a joint mortgage as some of the rates and criteria for mortgages with bad credit are very attractive and much more competitive than you might think. All you need is the right broker.
- Your broker can help you understand the advantages of getting a mortgage, married vs single, from a tax or poor credit rating point of view.
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Does My Spouse Have Any Right To My House If I Owned It Before Marriage
Posted by Michael H. Moreno | May 29, 2020 | 1 Comment
Under California Community Property Law, the short answer is likely YES, even if your spouse was never added to title.
This may seem surprising to you, but this result is based on the general premise of California Community Property Law that anything earned by either party during marriage is 100% community property. This means that any earnings made by either party during marriage would be split down the middle in a divorce / dissolution proceeding. However, if you bought the home prior to getting married, you might naturally be thinking to yourself, Hey, but I owned this house before marriage, that means the house is entirely mine! This is a valid thought, but what if your spouse were to reply, But I helped to make all those mortgage payments every month, I should get something for those payments!
The law, in this case, would agree with your spouse. As long as the mortgage payments made during marriage were made with community property earnings, i.e. money that was made by one or the other spouse during the marriage, then the community has gained an interest in the home, just as your spouse argued. The law reasons that because money belonging to your spouse was spent on the home’s mortgage to pay down principle, even though you owned the home prior to marriage, your spouse has now established an interest in the home through the mortgage payments.
Benefits Of Having One Spouse On The Mortgage
There a several reasons amarried couple might want to purchase a home in one spouses name only:to protect the buyers interests, to plan their estate, to save money, or toqualify for a mortgage.
Avoid credit issues onyour mortgage application
Serious mortgage problems can arise when one personon a joint application has poor or damaged credit.
Thats because mortgage lenders pull a merged credit report with history and scores for each applicant, and they use the lowest of two scores or the middle of three scores to evaluate applications. The score they use is called the representative credit score.
Unfortunately with two applicants, lenders dontaverage out the representative scores. They discard the better applicants FICOscore completely and make an offer based on the lower one.
This could easily result is ahigher interest rate. Or, if your spouses credit score is low enough, you mighthave trouble qualifying for a loan at all.
Save money on mortgageinterest
If one spouse has passable creditbut the other has exceptional credit, the higher-credit spouse might considerapplying on their own to secure a lower mortgage rate.
This could save you thousands onyour home loan in the long term.
A few years ago,the Federal Reserve studied mortgage costs and found somethingstartling. Of over 600,000 loans studied, ten percent could havepaid at least 0.125% less by having the more qualified buyer apply alone.
Preserve assets if one spouseis debt-challenged
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Applying With Your Spouse
Your mortgage lender bases affordability on your combined incomes.
So applying for a mortgage with your spouse could help you qualify for a bigger mortgage amount.
In most cases:
Your mortgage payment cannot exceed 28 percent to 31 percent of your gross monthly income.
Lets say you apply for a mortgage alone and you earn $60,000 a year, or approximately $5,000 a month.
Your mortgage payment cannot exceed $1,550
In such a scenario, you can afford to spend up to $305,000 on a home. This is assuming a 30-year fixed-rate mortgage with an interest rate of 4.5%.
Now lets say your spouse earns $35,000 a year, resulting in a combined yearly income of $95,000 or $7,900 a month.
Applying for a mortgage with your spouse now qualifies you for a mortgage payment up to $2,400 a month, or a home purchase up to $475,000.
