Home Buying in 94536>Question Details

Muthu Krishn…, Other/Just Looking in 94536

Is it better to take loan on one person or both persons for buying a property?

Asked by Muthu Krishnan, 94536 Wed Jan 7, 2009

Me and My wife are planning to buy a property. We both are working and invidually we both can afford to buy thw house. In this scenario, is it better to take loan on one name or both of our names? what are the advantages and disadvantages of both?

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Answers

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Hi Muthu:

Reasons why picking one income over the other may be advantageous when you only want one person on the loan:

1) Credit mid-score for one of you is substantially higher and crosses a lender threshold for loan pricing adjustment.
2) Higher income produces a lower DTI ratio that crosses a lender threshold for pricing adjustment.
3) One income has consistent bonus and/or overtime pay that stretches for at least 2 years and produces a lower DTI ratio.

Regarding one or both spouses on the loan:
A lender would prefer to have both of you on the loan because that makes them more confident that someone will pay the mortgage - but I have never heard of a lender offering a benefit to do so. The only benefit of doing this as a buyer would be to lower DTI. Then again, if one of the spouse’s mid-scores is low there may be an overall negative effect.

Note that if both spouses are on the loan, both must be on title; however, you can have only one spouse on the loan with both spouses on title.

You may want to ask this same question to a Tax and/or Estate Planning specialist.

Best Regards

-Steve
0 votes Thank Flag Link Wed Jan 7, 2009
If you need both of your incomes to qualify then you will need to apply jointly for the loan. However, If one of you can afford the payment with just your income and the other has not-so-good credit then it would be in your best interest to apply with just the better-credit borrower.

If you have questions on the loan qualifiction process, you are welcome to contact me.
Luke Allison
Flagstar Bank
828-777-8828
Luke.Allison@flagstar.com

Apply Online @ flagstarloans.com/lallison
0 votes Thank Flag Link Wed Jan 7, 2009
Your CPA should be able to assist you both of you would be on title of home. Depends on tax advantage.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Wed Jan 7, 2009
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