Married couples usually apply for a mortgage and buy houses jointly, but that doesn't have to be the case. You can buy a house on a mortgage without involving your spouse, depending on your circumstances. Below are some reasons you may want to buy a home without your spouse.
Your Spouse Has a High Debt-to-Income Ratio
Your debt-to-income ratio compares the values of your total debts to your total income. Lenders use this ratio to determine whether or not you can repay your loan. For example, a high debt-to-income ratio means you have a lot of debts and low income, and you are more likely to default on subsequent loans. A high debt-to-income ratio might bar you from accessing a mortgage.
Lenders will consider both of your debt-to-income rations if you apply for a mortgage as a couple. Your spouse's high debt-to-income ratio can ruin your chances of mortgage qualification. In such a case, you may want to apply for the mortgage and buy the home in your name only.
You Want to Enjoy Lower Interest Rates
Lenders consider multiple things, including your income, location, and credit score, when determining mortgage interest rates. Credit scores usually have a significant weight on interest determination. Both of your credit scores matter when you apply for a mortgage as a married couple. Thus, your partner's high score might drive your interest rates up.
Remember that mortgage loans usually amount to hundreds of thousands of dollars. Thus, even a modest increase in rates, a percentage of the loan, can increase your interest by thousands. Applying alone may help you minimize the interest rate.
You Want to Own the Home Alone
You may also want to buy a home alone to ensure that you maintain sole legal ownership of the property. People have different reasons for seeking sole property ownership. For example, you may want to own a home alone so that:
- Your beneficiaries, such as children from previous relationships, can easily inherit the property after your demise
- You don't have to divide the property with your spouse in case of divorce
- Your spouse's creditors cannot seize the home and sell it to recover their funds
Note that applicable state laws determine whether your spouse has a stake in your property. For example, in some states, any property you buy during your marriage belongs to both of you unless you use marital funds for the purchase. Consult an attorney for legal advice on property ownership for married people.
Lastly, you may also want to buy a home alone if your partner does not qualify for the process. For example, mortgage lenders usually require employment and income histories and credit scores. You must apply for a mortgage alone if your spouse lacks the documentation. An example is if your spouse is unemployed.
For more information, reach out to a real estate agent near you.