July 30, 2021

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Will my spouse’s debt affect our joint mortgage application?

Common mortgage debt can affect your chances of getting a low interest rate. Here’s what you need to know about debt before applying for a loan. ((iStock)

When a couple applies for a joint mortgage to buy a piece of property, their incomes are combined to create more purchasing power. At the same time, however, any debt borne by a spouse is also counted as a joint mortgage debt. When a person is heavily indebted to their name, it can affect your collective creditworthiness, credit options, and mortgage rates.

With that in mind, here are some steps you can take to apply for a mortgage when faced with debt. You can also visit an online mortgage broker like Credible to Preview your pre-qualified mortgage rates on the way to joint home ownership.


Does my spouse’s debt affect our joint mortgage application?

Unfortunately, if you do decide to use your spouse as a co-borrower, it is likely their debts affects your loan options. Put simply, mortgage lenders have strict requirements for the debt ratios that they will accept.

In general, they aim for a front-end rate of 28%, which is the amount of income that is spent on housing costs. They also aim for a back-end rate of 36% or less that includes all of your debt payments including your mortgage loan. If you have too much combined debt, it will affect your creditworthiness.

Note, however, that your debt ratios are not the only factor mortgage lenders consider when approving a home loan. In particular, they look at your creditworthiness as well as your total income and assets.

When you need to get a grip on your debts and other monthly payments, explore yours Debt Consolidation Loan Options by Visiting Credible Compare rates and lenders.


Common Mortgage Options When Your Spouse Has A Lot Of Debt

Fortunately, there are ways to get a home loan even when you have to significant debt. Read on to find out which method works best for you.

1. Apply for a mortgage as a single applicant

The first option is for a spouse to apply as a single applicant. If you are applying without your co-borrower, only your assets and liabilities need to be considered. The downside to applying as an individual, however, is that it only takes into account your income, which can affect your home purchase price. Split mortgage applications take into account the incomes of both applicants and you may receive approval for a larger loan.

When you’re ready to apply for the joint home mortgage, visit Credible to get it personalized mortgage rates and pre-approval letters without affecting your credit score.

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2. Find out about other home loan options that allow a higher DTI

If you have been turned down on a mortgage program because of a spouse’s debt, it doesn’t necessarily mean you will be turned down on every mortgage. In fact, certain types of loans allow higher rates Debt-Income Ratio (DTI). In particular, you should look into government-supported loan types like FHA loans, which may have more flexible qualification standards.

Regardless of the types of home loans you are exploring, be sure to shop around. Different Mortgage lender have different prices and fees so shopping in the area can help you secure a lower interest rate.

To get an idea of ​​what your monthly payments would look like, see Credible to Preview your pre-qualified mortgage rates.


3. Improve the overall DTI

Another way to deal with the situation is to deal with your debt before you find your perfect home together. If your combined debt to income ratio is currently too high, you can work to improve it by paying off your debt.

One way to reduce your debt is to consider a debt consolidation loan. A debt consolidation loan is a personal loan that allows you to pay off all of your existing debts and combine them into a single monthly payment.

You can use Credible’s personal loan calculator find the best personal lending rates.

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Can a couple buy a house on behalf of one person only?

While it is perfectly possible for a married couple to buy a home with just one person’s name, it may not be the right choice for everyone. If you choose to go this route, you need to consider some pros and cons.


  • You can buy a house right away: Applying as an individual applicant gives you the freedom to start looking for a home right away. If you’re working on improving your debt ratios so you can apply to your co-borrower, it may be a while before you can start seriously looking for a home.
  • You may be able to secure a lower interest rate: Borrowers with higher debt ratios and lower credit scores are charged with the highest interest rates and fees. However, if an individual applicant has a strong financial background, they may be able to get a lower interest rate.


  • You may have a lower credit limit: If you are applying for a mortgage as a single applicant, only that person’s income will be considered when determining your mortgage Pre-approval amount and you might be forced to look out for lower selling prices.

Visit a Online mortgage brokers like Credible to get personalized rates within three minutes without compromising your creditworthiness.

Do you have a finance-related question but don’t know who to ask? Email the expert for credible money below [email protected] and your question could be answered by Credible in our Money Expert column.