If you recently got married and want to buy a house with your new spouse, you may wonder how to go about doing this if he or she has bad credit. Bad credit can affect your eligibility for a mortgage, and it can affect other things too. Here are several things to understand if you are in this situation.
Buying a House Jointly Is Not Required
The first thing to understand is that you can purchase a house on your own, even if you are married. You do not have to jointly apply for the loan. Instead, you could do it on your own. By doing it on your own, the lender would only consider your income, job, and credit. The lender would completely disregard all your spouse's information, because he or she would not be a borrower of the loan.
If you do this, you could still add your spouse's name to the deed on the house, which means both of you own the house; however, your name would be the only one on the loan for the house.
The Pros and Cons of Applying on Your Own
Before you rush into this decision, it's important to understand the pros and cons with applying for a loan on your own if your spouse has bad credit. One benefit of filing alone in this situation is that you would most likely qualify for a loan. The second benefit is that your interest rate is likely to be lower than it would be if you qualified applying jointly.
One of the downsides to this is the fact that you might not get approved for a house loan that is high enough for the type of house you want to buy. This occurs because the lender will only be considering your income, even though your spouse will probably be helping you pay the mortgage and other bills if you buy a house.
Because of this, you may be stuck buying shopping for a house in a lower price range than you had hoped for, but this is a tradeoff you will have if you decide to apply for the loan on your own.
It can be hard to know how to handle a situation like this without talking to a lender. That is why you may want to contact a lender and explain your situation before going any further. To do this, call a lender of your choice today to discuss your situation.
Share29 June 2017
When I began my first business selling sports equipment locally, I knew the sports-world well, and I knew how to run a business. One thing I did not know a lot about was the financial world. I had never applied for a loan in my life other than when I financed my car with the dealership in-house financing. My first application at a large bank was denied. I began looking into my other options, and I found that there were more lenders for new businesses than I realized. I applied at local credit unions, local banks, and other business lending services. I was able to secure more funding than I even expected, and my credit is just average. I created this blog to help other new business owners realize that there is funding out there. You just have to find it and apply! Don't give up on your dream.