Adding Your Spouse To Your Mortgage: What You Need To Know

Adding your husband to your mortgage involves several steps and considerations. Firstly, it is recommended to consult a mortgage adviser or lender to understand the legal processes, expenses, and alternatives. Your husband will need to undergo credit and affordability checks, and you may need to refinance your home, resulting in a new mortgage application and potential changes to interest rates. Adding your husband to the mortgage can lead to joint ownership and improved borrowing power, but it's important to carefully weigh the financial and legal implications. If you're in a community property state, your husband's income and debts may impact your ability to get a mortgage, even if he isn't listed on the loan. Additionally, consider the type of loan and explore options like the HomeReady loan, which allows for extra household income without adding your husband as a full co-borrower.

How do I add my husband to my mortgage?

Legal processes and expenses

Adding your husband to your mortgage involves legal processes and expenses. The first step is to contact your lender to see if you can simply add your husband to your existing mortgage. However, it is likely that your lender will require you to refinance your home, essentially taking out a new mortgage. This process will involve a new application, credit checks, and potentially higher interest rates if your husband's credit score is lower. You may also need to hire a solicitor to provide legal advice and help you decide on the division of ownership of the house.

When adding your husband to your mortgage, you will need to fill out a Uniform Residential Loan Application and submit various documents, including full names, social security numbers, pay stubs, bank statements, and tax returns. Both you and your husband will need to undergo credit and affordability checks to ensure you can both keep up with the repayments. It is important to carefully weigh the financial implications and legal considerations before proceeding.

If you are considering adding your husband to your mortgage, you should be aware of the potential expenses involved. There may be closing costs and solicitor fees associated with the process. Additionally, if you decide to hire a solicitor, they may charge a fee for their services. It is essential to consider these costs when making your decision.

In terms of legal processes, it is important to understand the different types of ownership that you can choose from. Tenants in common allows you and your husband to decide on the percentage of ownership for each of you, which can be useful in the event of a future sale or death. On the other hand, joint tenancy means you both have equal ownership of the house, and in the event of death, the deceased's shares will automatically pass to the surviving spouse.

It is worth noting that there are alternatives to adding your husband to your mortgage. For example, you can add him to the title of your home using a QuitClaim deed, which can be obtained from a title company or a real estate attorney. This would make you co-owners of the home, but it does not give him any legal responsibility for mortgage payments. Additionally, in communal property states, a home purchased during the marriage would belong to both partners, even if only one spouse is on the mortgage or title.

Credit checks and eligibility

Adding your husband to your mortgage will require a new application, with joint credit checks. This means that both your credit scores will be taken into account. If your husband has a lower credit score, you may face higher interest rates.

It is important to note that the decision to refinance should be based on financial merits and whether it will improve your position. Consider the lower interest rate and/or payment of the new loan and the costs of refinancing. These factors are more important than the potential to raise your husband's credit score by adding him to the mortgage.

If your husband has a low credit score, it may be more beneficial for you to apply for the mortgage on your own, especially if you have a good credit score. This could save you thousands in the long term. However, if you apply for a mortgage on your own, you will solely carry the burden of that mortgage obligation. If you default, you will be held liable.

If you are unsure about the best course of action, it is recommended to speak to a mortgage adviser. They can check with their pool of lenders to see which lenders would be willing to add your husband to the mortgage. A solicitor can also provide legal advice and help you decide on the division of ownership of the house.

Pros and cons of joint ownership

Joint ownership of a mortgage can be an excellent tool for home ownership, but it is important to carefully weigh the pros and cons before deciding. Open and honest communication with your partner and seeking professional financial advice can ensure a smooth joint mortgage experience.

Pros

Joint ownership of a mortgage can provide an opportunity for couples to navigate the daunting path of home ownership together, sharing the responsibilities and rewards. It is especially beneficial when a single income might not be sufficient to secure a mortgage for a desirable property. With a joint mortgage, couples can take advantage of opportunities that might not be available to them otherwise. For instance, co-beneficiaries can submit their joint revenues and guarantees to get a higher amount of loan. This can be particularly helpful for young couples buying their first home, who may not have many resources.

Another benefit of joint ownership is that it can positively impact the credit scores of both parties if they consistently make timely mortgage payments. Additionally, in the event of a couple's break-up, it may be preferable for one partner to take over the mortgage to avoid new expenses.

Cons

One of the biggest disadvantages of joint ownership is that all co-owners are equally responsible for the payment of the mortgage. This responsibility remains even in the case of a separation, and until a bureaucratic solution is found to release one or more co-owners. In the event of the death of one of the joint owners, the heirs may have to take over the debt or sell the house to settle the outstanding debt.

Additionally, adding a partner to an existing mortgage may involve a whole new application, with joint credit checks and potentially higher interest rates if their credit score is lower. It is also important to consider that joint ownership may not be in your best interest financially, and lenders may not agree to add your partner to the mortgage.

Alternatives

If you are not ready to commit to joint ownership, there are other options available. For instance, your partner can simply be added to the deed of the house, and you can leave the house to them in your will. Alternatively, individual mortgages, guarantor mortgages, shared ownership schemes, rent-to-own agreements, and government first-time homebuyer programs offer alternative paths to home ownership.

How to divide up the ownership of the house

If you want to add your husband to your mortgage, you will need to contact your lender to see if you can simply add them. However, it is likely that the lender will tell you to refinance your home, which means taking out a new mortgage. Adding your husband's name to your mortgage through remortgaging offers potential benefits like joint ownership and improved borrowing power.

If your lender agrees to add your husband to your mortgage, you may need to hire a solicitor to provide legal advice. A solicitor can help you decide how to divide up the ownership of the house. Working out the percentages of ownership will be useful if you ever need to sell the property in the future.

There are two types of ownership arrangements: tenants in common and joint tenancy. Tenants in common is where you and your husband decide on the percentage of the house that each of you will own. It doesn't have to be a 50/50 split, but in the event of death, the deceased's portion of the house will pass to their next of kin, which may not be you. Joint tenancy, on the other hand, means that you both have equal ownership of the house, and if one of you passes away, that person's share will automatically pass to the other.

If you are considering adding your husband to your mortgage, you should be aware of the financial implications and legal considerations. Your husband will need to undergo credit and affordability checks, and if his credit score is lower, you may end up with higher interest rates. Additionally, you may be charged a fee by the solicitor for their help.

Alternatives to adding your husband to your mortgage

There are several alternatives to adding your husband to your mortgage. Here are some options to consider:

• Keep the mortgage in your name only: If you are married and the sole income earner, it may be beneficial for tax purposes to keep the mortgage in your name only. This can provide tax advantages, such as the ability to claim mortgage interest deductions. Consult with a tax advisor or accountant to understand the specific implications for your situation.
• Co-signing on the mortgage: If you need your husband's income to qualify for the mortgage, he can co-sign on the loan without being on the title. This option allows him to act as a guarantor, responsible for loan balances if you default. However, he won't be legally responsible for monthly payments, and this arrangement may be more complicated and time-consuming for lenders if you were to default.
• HomeReady loan programs: If your husband has good income but poor credit, you could explore a HomeReady loan from Fannie Mae. This program allows you to count extra household income toward your mortgage without adding him as a full co-borrower. His income can boost your borrowing power, and his poor credit score won't affect loan eligibility or interest rates.
• Renting to your husband: Instead of adding your husband to the mortgage, you could consider asking him for rent money to cover living expenses and utility bills. This option provides a clear financial arrangement and ensures that, in the unfortunate event of a breakup, he won't have any legal or monetary claims to your home.
• Execute your will: You can deed the house to your husband in your will, allowing him to assume the current mortgage as long as it is current and not in default. However, his low credit score could be an issue if he attempts to refinance the existing mortgage. Consult with a legal professional to understand the implications of this option.

Remember, the decision to add your husband to your mortgage or explore alternative arrangements is a significant financial choice. It's always recommended to seek personalized advice from a qualified mortgage adviser or financial professional who can guide you based on your unique circumstances.

Frequently asked questions