Home Buying With One Spouse on the Mortgage: Pros and Cons

Do you have to apply for a mortgage with your spouse?

No, both spouses don’t need to apply for a mortgage together when buying a house or refinancing their current home.

In fact, in some situations, having both spouses on the mortgage application can lead to mortgage-related issues. For example, if one spouse has a low credit score, it may be challenging to qualify for a loan or result in higher interest rates. In such cases, it may be beneficial to exclude one spouse from the mortgage application.

Luckily, there is a wide range of mortgage programs, including low- and no-down-payment loans, that make it easier for single applicants to buy a home.

In this article (Skip to…)

• Benefits of a single applicant
• Drawbacks of a single applicant
• Spouse with good income but bad credit
• Refinancing without your spouse
• One spouse on mortgage, both on title
• Both spouses on mortgage, only one on title
• Community property states
• FAQ

Why apply for a mortgage without your spouse?

In some situations, a married couple may benefit from applying for a mortgage without their spouse. Whether it’s due to credit, debt, income, or long-term plans, there are valid reasons to leave one spouse’s name off the loan. Here’s when it may make sense if a spouse is not on the mortgage.

1. One spouse has poor credit

When applying for a home loan with your spouse or partner, lenders check both of your credit histories. They use the lowest of your two scores, not the average. This score—known as the representative credit score—can hinder your chances of approval if one spouse has poor credit.

Even if one score is strong, applying for a home loan with your spouse’s credit score can drag down your chances if theirs falls below the lender’s minimum requirement. This often leads to higher interest rates. In some instances, it may entirely block your loan application. Most lenders will not consider scores below 580. If your spouse’s credit score is below that threshold, you might want to apply on your own instead.

2. One spouse has exceptional credit

If one spouse has exceptional credit and the other is just okay, it may make sense for the higher-credit spouse to apply alone. Doing this could lead to a lower mortgage rate and long-term savings. A Federal Reserve study found that one in ten borrowers could have paid at least 0.125% less by applying for a mortgage without their spouse or partner. Another 25% could have saved even more.

Ask your loan officer to run the numbers for you. Even a small gap in credit—like 699 vs. 700—can mean a $500 difference for every $100,000 borrowed. The catch? The spouse applying alone must qualify based solely on their income. That means they’ll need both a higher credit score and enough income to carry the loan on their own.

3. One spouse has too much debt

If your spouse’s debts include unpaid student loans, back taxes, or court judgments, those obligations could jeopardize your homeownership. In some cases, creditors can place a lien on the property. To help protect your home, it may be smarter for the spouse without debt to apply for the mortgage alone.

Buying the home in one spouse’s name can help protect it, especially if you’re using separate property or savings from before marriage. However, the level of protection depends on your state’s community property laws and when the debt was incurred. Before you buy, get legal advice to understand how property ownership works where you live.

4. One spouse doesn’t meet income requirements

If one spouse’s income is irregular, it may make more sense for the other to apply for the mortgage without their spouse. This often arises when someone is self-employed, has recently started a new job, or earns irregular income that’s difficult to document. Mortgage lenders typically want two years of stable, verifiable income.

In these cases, applying for a mortgage without a spouse or partner may be the best option, especially if that person earns a higher income and has an excellent credit report. Please note that they must demonstrate sufficient income to cover the entire loan amount, including mortgage payments and closing costs.

5. One spouse wants to simplify estate planning

Some married couples choose to keep only one spouse on the mortgage and on the home title to simplify estate planning. This is common when a married person wants to leave the home to children from a previous relationship. Keeping property ownership in one spouse’s name can help avoid legal complications later on.

In common law states, a house bought with separate property is easier to keep out of marital property claims. However, even then, state laws differ, particularly in community property states like California, Florida, or Texas.

Why have both spouses’ names on the mortgage?

If you’re thinking about applying for a mortgage without your spouse, there’s probably a reason. It’s a frustrating position to be in, but excluding one spouse’s name from the mortgage loan application can reduce your buying power or complicate approval.

1. Less income means smaller loan

When a married couple applies with only one spouse on the mortgage, the lender can’t count both incomes. That limits how much house you can afford. More income typically allows for a higher loan amount, so applying together often means qualifying for a larger home.

2. Potentially higher debt-to-income ratio

Omitting a spouse from the mortgage can raise your debt-to-income ratio (DTI) if the spouse applying has substantial debt. Since lenders consider your monthly debts in relation to your gross income, this could lower your loan amount or result in loan denial. That said, if your spouse’s debts are considerable and they earn little income, leaving them off the loan application may actually help your DTI and enhance your chances.

What if one spouse has high income but bad credit?

What if one spouse has good credit but doesn’t earn enough income to qualify, and the other has a higher income but a poor credit score? In this case, a HomeReady loan from Fannie Mae could help. It allows the spouse with good credit to apply alone while factoring in part of the other spouse’s income without adding them to the mortgage loan.

Since the spouse with poor credit isn’t on the application, their score won’t affect the mortgage rate or approval. To qualify, the applying spouse must have a minimum FICO score of 620 and make a down payment of at least 3%. The couple must also show they’ve lived together for the past 12 months for the additional income to count.

Can one spouse refinance a mortgage without the other?

If only one spouse’s name is on the existing mortgage loan, they can usually refinance on their own. This often happens when the home was purchased before marriage. But if both spouses are on the mortgage, they’ll need to apply together to refinance. A lender won’t allow one person to refinance if both names are staying on the loan.

In a divorce, one spouse can refinance to remove the other from the mortgage, but only with that person’s consent. The remaining borrower must qualify independently, meeting the income, credit score, and debt-to-income ratio requirements. Additionally, the person on the loan will be responsible for paying the closing costs.

Can one spouse be on the mortgage but both on the title?

Yes. If only one person’s name is on the mortgage loan, the other can still be added to the home title after closing, making them a co-owner. Keep in mind that the person on the loan is the one who’s legally responsible for making mortgage payments and dealing with credit consequences if they default. The co-owner listed on the title isn’t accountable for repayment, but their consent is needed to refinance or sell the property.

Can both spouses be on the mortgage but only one on the title?

It’s possible but uncommon. A married couple might want this setup for estate planning purposes, with both spouses on the mortgage but only one on the title. Most lenders prefer that all borrowers hold title because a person not on the title acts as a guarantor rather than a legal owner. Guarantors are responsible for the loan if the primary borrower defaults, but they aren’t liable for regular payments, which makes things more complex for lenders.

Mortgage rules in community property states

When you take title as “sole and separate property,” you both can still live in the house, but only you have an ownership stake. Your name is the only one on the deed. But this arrangement is not always entirely straightforward.

You will probably have to ‘quitclaim’

In community property states, merely taking title as sole and separate is insufficient. While it reflects your intent to claim ownership, it doesn’t consider your spouse’s wishes. In these states, both spouses jointly own anything acquired during the marriage, including real estate.

For clear ownership, you’ll need a quitclaim deed. This deed requires your spouse’s signature, which you’ll then need to record with the county. The quitclaim deed identifies the grantor (the spouse relinquishing rights to the property) and the grantee (the remaining spouse on title).

Community property states are as follows:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

In other states, you may also have to quitclaim, so you can’t secretly buy real estate without your spouse’s knowledge. And many lenders also require it for the same reason.

Government-backed loans in community property states

One advantage of having the mortgage and homeownership in your name only doesn’t apply in community property states. If you get a government-backed home loan like an FHA loan, VA loan, or a USDA loan, your spouse’s separate debts still count in your debt-to-income ratios.

For government-backed mortgages, the lender may pull the non-borrower’s credit report to verify their debts. However, that person’s credit score doesn’t count toward the application.

HUD guidelines state:

“The Lender must not consider the credit history of a non-borrowing spouse. The non-borrowing spouse’s credit history is not considered a reason to deny a mortgage application.

The lender must

• Verify and document the debt of the non-borrowing spouse
• Make a note in the file referencing the specific state law that justifies the exclusion of any debt from consideration
• Obtain a credit report for the non-borrowing spouse in order to determine the debts that must be included in the liabilities”

Fortunately, other loan programs don’t necessarily carry this requirement.

FAQS about buying a house without a your spouse

Remember that while these answers provide a general understanding, it is essential to consult with legal, financial, and tax professionals to obtain specific advice based on individual circumstances and local jurisdiction.

What are today’s mortgage rates?

Today’s mortgage rates are still close to historical averages for both home purchases and refinancing. You can reduce what you pay by only putting the most qualified applicant on the mortgage.

Check all your options to see what makes the most sense for your new home loan.