Most married or engaged couples thinking of buying a house combine their income and credit scores when applying for a mortgage. But sometimes, doing so may not help you achieve your goals, provoking the question: Can a married couple buy a home with only one partner’s name on the mortgage? The short answer is yes, though you want to understand the pros and cons of getting a mortgage without your spouse.
Key Takeaways:
- One partner in a marriage can take out a mortgage on their own to buy a home together.
- Having one spouse apply for a mortgage can make sense when the other has credit issues, too much debt, or assets you want to protect.
- With a single income, it may be more challenging to get a mortgage and borrow as much as you can with two incomes.
Why Would A Married Couple Buy A House Under Only One Name?
A couple may buy a home with only one partner’s name on the mortgage for many reasons.
One Spouse Has A Low Credit Score
When you buy a home with a partner, mortgage lenders typically use the average credit score of both borrowers. For example, let’s say you’re applying for a conventional loan. If you have a 700 credit score and your partner’s is 500, the average is 600. Because conventional loans generally require a 620 credit score to qualify, you may want to only put your name on the mortgage application because you need a credit score of at least 620 to qualify.
One Spouse Is Carrying A Lot Of Debt
Lenders also look at your debt-to-income ratio, which shows how much of your gross monthly income is dedicated to debt payments. While specific DTI ratio requirements vary by loan type and lender, the industry rule of thumb is known as the 28/36 rule. That means your front-end DTI ratio, which compares your mortgage payment to your gross income, should not exceed 28%. The back-end DTI ratio, which compares all debts to your income, should not exceed 36%. If one spouse has a lot of debt that would raise your DTI ratio, you might want to apply for your loan in the other spouse’s name.
One Spouse’s Income Doesn’t Meet Requirements
Lenders will require proof of income from both borrowers, which usually requires you to provide W-2 forms, tax returns and bank statements from the past two years. If you or your spouse are self-employed or did freelance work that’s difficult to document, you might want to leave that partner off the loan application. The same consideration comes into play if one of you wasn’t working because you were in school or taking time off to care for your family.
One Spouse Wants To Simplify Estate Planning
It also makes sense to put only one name on the mortgage application if you plan to leave your home to someone besides your spouse, such as children from a previous marriage, when you die. This is especially important if you live in a community property state where all assets and debt belong to both spouses.
One Spouse Wants to Protect Their Assets
Another reason for one partner to apply alone for a home loan is to protect the other spouse’s assets.
Owning a home can open you up to liability. For example, what happens if a guest gets injured while on your property? You could be sued and found liable for medical care and damages. If only one spouse owns the home, the other spouse’s assets may be protected from being included in a judgment. The same could be true if you struggle to make mortgage payments and the lender comes after you for repayment. The assets of the spouse not on the mortgage could be safe from the lender.
Whether only putting one spouse on the loan protects the other spouse’s assets depends on the property laws in your state. Check with a legal expert to ensure you understand the implications of keeping one spouse’s name off the mortgage and deed.
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Can You Buy A House Without Your Spouse? Things To Consider
If you’re applying for a mortgage without your spouse, you may think it will be a breeze. Unfortunately, it’s not always that simple. Here are a few things to know if you decide to get a mortgage without your spouse.
You May Limit How Much You Can Borrow
If you’re a two-income household, getting a mortgage together increases your income and your ability to borrow more. With only one spouse applying for a mortgage, the lender’s decision will be based only on one income, limiting how much you can borrow.
The exception would be a U.S. Department of Agriculture loan, which considers income from all household members for loan qualification, whether they’re on the loan or not. To meet the loan’s eligibility requirement, your combined household income must fall within a certain percentage of the area median income where you’re buying a property.
Your Spouse’s Debts May Still Affect Mortgage Qualification
If the home you want to purchase is in a community property state and you’re applying for a Federal Housing Administration or Department of Veterans Affairs loan, your debt and your spouse’s debt will be considered even if only one spouse is on the mortgage.
You May Also Want To Keep Your Spouse’s Name Off The Title
If you live in a common-law state, you can leave your spouse’s name off the house title. A title and a mortgage are different aspects of homeownership. The name on the title is the person who owns the property, and the name on the mortgage represents who’s responsible for paying back the loan.
Some spouses don’t include their partner’s name on the title to keep their finances separate, personally manage their life estate or protect their home from creditors because their spouse has a poor credit history.
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Understanding Common Law Vs. Community Property States
How the law applies to a married couple’s property depends on which state you live in. States can be broken into two broad classifications: common law and community property.
Most states are common law states. Under this system, property acquired by one member of a married couple is owned only by that person. Their spouse does not get an ownership interest in that property. A couple can jointly own assets, but only if both names are on it.
In a common law state, only putting one person’s name on the mortgage and home deed means their spouse has no ownership interest in the property. They have no right to the property if their spouse wants to sell it or dies and leaves it to someone else. However, it could protect the non-owning spouse from creditors if the owning spouse stops paying the mortgage.
By contrast, the law in community property states says that any property acquired during a marriage is automatically considered jointly owned by the two spouses. This also includes debts incurred during the marriage, so there’s essentially no benefit to only applying under one spouse’s name in these states.
The community property states are:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
The following states allow a couple to opt in to a community property system but don’t require it:
- Alaska
- Florida
- Kentucky
- Tennessee
- South Dakota
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FAQ
Here are answers to common questions about married couples buying a home under one name.
The Bottom Line
Leaving your spouse’s name off your mortgage or title does not reflect the quality of your marriage. In many cases, it can be the best choice for both of you to get the house you want. It could also ensure that you get the best home loan terms.
T.J. Porter
T.J. Porter is a Boston-based writer who focuses on credit cards, credit and bank accounts. When he's not writing about all things personal finance, he enjoys cooking, esports, soccer, hockey, and games of the video and board varieties.
