New to Real Estate · Nashville, TN · Member since 2022 · 1 post · 0 votes
Hello,
The question:
Are there any reasons I should include my wife as a co-borrower if I can qualify on my own and she has no income?
Context:
My wife and I are looking to get pre-approved for a mortgage as part of our process to purchase our first investment property. All of the applications ask if I will have a co-borrower on the loan and we are unsure if we should add my wife or not. My wife currently does not have any income. Given my DTI and credit score, I'm pretty confident I could get approved on my own. But we don't know if there are any benefits to including her as a co-borrower even though she doesn't have any income.
Regardless, many jurisdictions require her to be on the mortgage as a spouse, to put the world on notice of a marital asset; while not being on the Note.
Regardless, many jurisdictions require her to be on the mortgage as a spouse, to put the world on notice of a marital asset; while not being on the Note.
I can Agree with @Bob Reinhard on this one! if you can qualify on your own (Depending on the state of course) I always take the route of doing it on your own and then putting the spouse on the title. Depending on the Credit score this could effect the interest rate/closing costs if her credit scores are lower than yours.
However if your spouse on the loan doesn't affect the what was mentioned above then by all means, keep her on the mortgage!
If you have any other questions please let me know! I would be more than happy to help!
@Jase Hackman - I wouldn't put her on if she isn't contributing financially, or her credit score isn't much better than yours. Her credit profile might hurt in this situation. You can still put her on the title.
In any case, a property bought in a marriage is considered marital assets in court regardless of who's on the mortgage :)
Yes- main reason to include her would be if she wants to be included and would feel frustrated not being part of the purchase in that way. Second reason would be to keep active installment credit for her so that later on she has a healthy credit profile when she does have income for any future purchases. No one ever plans on getting divorced but it is considerably harder logistically when the partner who stayed home with kids has no credit to get an apartment or refinance the house into their name.
If she is on other installment debt and doesn't particularly care either way, then adding her would just make things more complicated.
Are there any reasons I should include my wife as a co-borrower if I can qualify on my own and she has no income?
Context:
My wife and I are looking to get pre-approved for a mortgage as part of our process to purchase our first investment property. All of the applications ask if I will have a co-borrower on the loan and we are unsure if we should add my wife or not. My wife currently does not have any income. Given my DTI and credit score, I'm pretty confident I could get approved on my own. But we don't know if there are any benefits to including her as a co-borrower even though she doesn't have any income.
Thanks for your help!
No. She'll be on title regardless, but leave her off of the note. If you two get serious about building wealth through real estate and want to use conventional financing, if she does get an income down the road, she may be able to qualify with 10 financed properties and you may be able to qualify with 10 financed properties. If she's encumbered in your properties, then it limits the number of financed properties you can own.
Hi @Jase Hackman - the only reason to include her would be if you are planning on using funds from bank account(s) that are solely under her name in order to cover the upfront costs of the loan. Otherwise, she likely will not enhance your chances of qualifying for a loan. She can still be on title for the property if you'd like.
Feel free to reach out if I can be of any further assistance to you two in making your first investment property purchase!
Offering a perspective from business purpose lending, we use the credit score that is highest among the borrowers. Business purpose mortgages are strictly for non owner occupied investment property, though. So you would not be able to use a loan like ours for a house hack where you intend to live in one of the units. Additionally, we disregard DTI and base our approvals on your investing experience, credit-worthiness and the asset that you are buying.