“Should Two People be on a Mortgage?”

Should Two People be on a Mortgage?

 

Having someone on title to a home may be very different from adding someone to a mortgage, especially when one of the borrowers make a small amount of income or no income at all, especially when that persons has debts that will mess up the debt ratios.

 

Once I run the math, I need to handle the explanation process, as egos can immediately come into play if I have to recommend that only of them be on the mortgage. This scenario happens all the time. Another similar issue shows up when one borrower doesn’t have good credit or credit that would hurt the interest rate for the transaction.

 

If there is no option and two incomes are needed to make the mortgage happen, that means we need to work with income and credit.

 

Unfortunately, when it comes to obtaining a mortgage, almost all the time, it comes down to the math and will the math work to be able to get the clients the mortgage.  

 Image courtesy of Jesadaphorn/freedigitalphotos.net

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 29 commentsJoe Petrowsky • September 03 2015 11:15AM

Comments

So true - it really is about the math. I wish more people understood that a year before they want to apply for a mortgage! 

Posted by Lise Howe, Assoc. Broker and Attorney Licensed in DC, MD, VA, (Keller Williams Capital Properties) almost 3 years ago

Joe, I can understand how egos can get ruffled, but they need to understand the objective and how to achieve it.  

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) almost 3 years ago

Ususally don't find a problem with the egos...they have the home buy goal in mind but like Lise said I wish buyers would start the process earlier and be ahead of the curve buy, Joe.

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) almost 3 years ago

Good morning Joe.  One can't argue with math.  It takes a creative mind and data to get that mortgage.  

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty AR LLC) almost 3 years ago

Hi Joe.  Being on the deed is more important then the mortgage instrument.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) almost 3 years ago

There are wishful. thinkers out there who would like to use both incomes and one credit score...interesting...not happening of course.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) almost 3 years ago

I can see how this would be a tricky situation to explain, but yes, it is all about the math.

Posted by Women of Westchester Working Together, Women helping Women get ahead (Women of Westchester Working Together) almost 3 years ago

Joe, I have had many transactions where they had to obtain mortgage in just one person's name.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) almost 3 years ago

Joe,it all comes down to the math and then handling the egos to reach the objective. Enjoy your day!

Posted by Wayne Martin, Real Estate Broker (Wayne M Martin) almost 3 years ago

Good morning Joe,

One of the hardest parts of the job is two working as one thinking they could afford something that because of credit becomes a starter!

Make yourself a great day.

Posted by Raymond E. Camp, Licensed Real Estate Salesperson Greater Rochester (Howard Hanna Real Estate Services) almost 3 years ago

Hi Joe -- as others have commented it is about the math but egos can come into play which makes your role so important to explain the process and keep the borrowers' goal in mind.  

Posted by Michael Jacobs, Los Angeles Pasadena Area Real Estate 818.516.4393 (Coldwell Banker Residential Brokerage) almost 3 years ago

Joe, my lender has had to tip toe around these conversations too, and must be tough! 

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373) almost 3 years ago

Good morning Joe  - I know a wife who was upset that her husband was on the deed but not the mortgage. It made her feel vulnerable. Your post explains it well.

Posted by Wayne and Jean Marie Zuhl, The Last Names You'll Ever Need in Real Estate (Samsel & Associates) almost 3 years ago

Joe, it's my understanding that even if only one owner is on the mortgage, the second can be added to the deed.  That would be enough to take care of most of the ego issues that I encounter.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) almost 3 years ago

Really Joe Petrowsky ? A buyer on the deed but NOT on the mortgage? I'm surprised.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) almost 3 years ago

This is a great topic. Some home buyers do not understand the smart option of leaving a party off of the mortgage.

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) almost 3 years ago

Good morning Joe. A terrific explanation of what most do not know. Great job.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) almost 3 years ago

Unless there is a credit reason then I prefer to see both on the loan as it provides additional protection should something happen to one of them that being on title solely does not

Posted by David Shamansky, Creative, Aggressive & 560 FICO - OK, Colorado Mtg (US Mortgages - David Shamansky) almost 3 years ago

Joe

Thanks for sharing your insight . . . . A professional mortgage will show the buyer the best way to obtain a mortgage.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) almost 3 years ago

Hi Joe, great question. It all depends on the situation. Especially in a new marriage. 

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) almost 3 years ago

Hi Joe Petrowsky ... In the State of Washington, real property is a comunity property state... Yet, now more than ever, people, couples, purchase real estate before they intend to marry... I can attest to the fact of egos flaring when it's advised by the lender that only one of them take the mortgage... I'm in favor of whatever makes the transaction happen, work it out later... Interesting post.

Posted by Rene Fabre, Marketing in the Digital Age (First American Title) almost 3 years ago

Joe that is a good way of putting it "it comes down to the math"

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 3 years ago

There is so much to consider when getting a mortgage and it is so vital to work with a seasoned professional who can guide you!

Posted by Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional, Palm Harbor, Dunedin, Clearwater, Safety Harbor (Charles Rutenberg Realty) almost 3 years ago

Good Morning Joe: When humans let their egos rule, rationale becomes useless.

They better listen to you.

BTW, my buyer like you.. a lot..

Posted by Maria Gilda Racelis, Home Ownership is w/in Reach. We Make it Happen! (Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington) almost 3 years ago

Just stopping by to wish YOU and yours a very happy holiday!

Posted by Marco Giancola, Realtor (305)608-1922, Miami Beach Florida (Beachfront Realty) almost 3 years ago

Hi Joe Petrowsky ,  We have seen several instances where they had to drop one person off of the mortgage, just to get approved.

Posted by Larry Johnston, Broker,Friends & Neighbors Real Estate, Elkhart,IN (Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC) almost 3 years ago

My last buyers were in this situation. The wife had to be removed because of her credit.

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty, Martha Hilton, Broker) almost 3 years ago

The numbers have to work. I see this a lot with couple. Sometimes the house has to be in one person's name and not in both of the married couple's name. This can cause issues down the road if there is a divorce. 

Posted by Debbie Laity, Your Real Estate Resource for Delta County, CO (Cedaredge Land Company) almost 3 years ago

In our military market the working spouse usually take the loan in his name but puts the wife on the deed. It also save the processing time and possible added complications. Good post Joe.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) almost 3 years ago

Participate