Mortgage shopping differs depending on whether you are single or part of a couple. Here are some things to keep in mind when trying to land a great rate.
As marriage realities have changed over the years, so have homebuyer statistics.
Three decades ago, for example, more than 80 percent of homebuyers were married. But as of 2016, that figure had dropped to 66 percent, the Consumer Financial Protection Bureau reports this Valentine’s Day.
One tenet of financially savvy homebuying remains the same, though — doing your homework. As the CFPB puts it: “Whether you’re looking to buy a home by yourself or with someone else, it pays to do your homework, know what you’re getting into, and shop around for a mortgage.”
Still, mortgage shopping differs depending on whether you are a single, or part of a couple.
Mortgage shopping as a single person is arguably less complicated in that you have no other half to consider. There are key caveats for single homebuyers, though:
- Know the rules regarding discrimination. By law, lenders cannot discriminate against you simply because you are unmarried. As the CFPB notes: “If you have enough money for a down payment, enough income to support the monthly payments, and if you meet the other eligibility criteria … then you can qualify for a mortgage as a single person.
- Make sure your finances are in order after a divorce. Before shopping, make sure your finances are separated from those of your ex. One example the CFPB notes is that you should make sure the mortgage is paid off on any home you previously owned with a former spouse.
Couples, whether married or not, also have key decisions to make before signing off on a mortgage:
- Understand how your partner’s credit score affects you. Lenders generally use the credit score of the person with the lowest score when evaluating mortgage applications, according to the CFPB. If only one person applies for the mortgage, know that lenders generally won’t consider the other person’s income.
- Consider getting a mortgage in one person’s name only. If you have great credit, and your partner has lousy credit — or vice-versa — it might make sense to have just one person apply for the mortgage. You’ll need to qualify based on your own credit and income. The CFPB notes that lenders are not allowed to discriminate against applicants because they are married but want to get a mortgage on their own.
To read this article on MoneyTalksNews click HERE