Applying for a Home Loan: Single Versus Joint

Is it better to apply for a single or joint home loan application?

Are you and your spouse planning to apply for a home loan? Do you know your options for applying individually or jointly for a mortgage? If you’re unsure of which option is best for the two of you, consider the following questions to ensure you and your spouse make the best decision for your finances.


Do you live in a community property state?

In community property states, lenders are required to request a credit report for the non-borrowing spouse. Why? In community property states, the debt of each spouse is considered to belong to both. The phrase “what’s mine is yours” is the perfect way to understand how a couple’s debts are considered in community property states.  The debts taken into consideration are not just limited to current open accounts. Collections, judgments, liens, and any liabilities with a balance may impact the other spouses DTI and ability to qualify. If you live in the following states, you reside in one of the nine community property states:

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


If you don't live in a community property state, ask yourself the following questions:

What is your combined income?

One question you may need to consider is, will both incomes be needed for qualification? When you apply jointly, your incomes will be combined which strengthens your application and increases the chances to qualify for a mortgage. It is important to note, if you apply individually, only that individual's income will be considered for the application. In cases of individual applications, it may be best to use the individual with the highest income to strengthen the application.


What is your combined debt? What are your credit scores?

The second question to consider is, are credit scores for both individuals in good standing? It’s important to remember that applying jointly will not only combine incomes and assets, but it will also consider debts of both spouses. If one spouse carries too much debt, applying jointly can create more obstacles for qualification. Debts not only consider open lines of credit and loans, but also derogatory accounts. These include charge offs, collections, judgements, liens and more that could be drastically impacting credit scores. On a joint application, the lowest of the two credit scores will be considered for the pricing of the loan. If scores are too low this could result in higher interest rates or even denial of approval.


Will you be applying for loans or credit in the future?

If an application is done jointly, the debt of the mortgage will be added to each spouse’s credit. This can pose a problem for future applications for other lines of credit or loans. For example, if a couple applied jointly for a mortgage of $300,000, each spouse will now have a $300,000 debt obligation. Because of this, some couples consider applying individually. This allows the other spouses income to be open and available to leverage it for any other loans needed in the future.


Do either of you have negative items on your credit report?

In some cases, even in a non-community property state, approval may only be available by doing a joint application to consider both spouses incomes. If credit for one or both individuals is not where it needs to be, there are options to improve the credit score for chances of approval and better interest rates. Do you or your spouse have any of the following on your credit? If so, these items could be severely impacting your credit scores.

  • Collections
  • Late Payments
  • Student Loans
  • Medicals
  • Bankruptcies
  • Tax Liens
  • Judgments
  • Repossessions
  • Foreclosures


Improving your credit score improves your chances of qualifying for a home loan.

Having an optimal credit score will make for a smoother qualification process. If you’re unsure of where your credit is at, it’s always a good idea to consult with a credit expert. MSI Credit Solutions assists consumers with credit services, real estate services, and lending resources.

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*The information in this article has been provided strictly for educational purposes.

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