If I am on deed but not applying for mortgage, will I hurt our chances of acquiring a loan?

Asked by Jennpetes, Tyngsboro, MA Tue May 20, 2014

My husband and I are buying our first house. We both have excellent credit, but I am a stay at home mom so he is the one applying for the loan. He has virtually no debt. The credit card we have ended up carrying a balance on (a few thousand dollars) happens to be mine. Also, we have maybe $1500 of medical bills left that we are paying off through payment plans. So I have great credit but no income and more debt than my husband. Will I effect our ability to be approved for the mortgage if my name I attached to the house in any way?

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Claudia Muller’s answer
Claudia Mull…, Mortgage Broker Or Lender, Fremont, CA
Tue May 20, 2014
Jenn: It depends on the type of financing you are utilizing.
FHA: requires the debt of the nonborrowing spouse (even if nonborrowing spouse is not on the deed) be calculated into the qualifying ratios for the transaction. This keeps 'the couple' from over extending themselves.
Conventional: does not count the nonborrowing spouse's debt and allows that spouse to be on the deed as a 'Title Only' status.
FHA is more flexible on the qualifying ratios than conventional finacing (they will allow a higher debt to income ratio).
As always, it is highly recommended that prior to even looking at homes, you consult with a lender and get yourself preapproved. Once you get your financing in place, you will know that you can/will close your transaction.
Happy House Hunting!
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RonS, , Concord, CA
Tue May 20, 2014
Usually, whoever is to be on title, needs to be on the loan. If you have a credit card and he is a user of the card (You said "WE have"), he will share the debt and it will be included in the calculations.

I would caution getting married to a home loan if one credit card and only $1,500 in other debt is the difference between you qualifying for a home loan or not.

Just because you may qualify, doesn't mean you should go through with a purchase if cash flow is that tight.
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