Difference in Applying for Home Loan Married vs Engaged

[bob1234]

Hello,

My fiancee (who lives in Texas) and I (in process of emigrating to the USA) are looking into buying a house. I will not have a job when I arrive in the US as I have to wait for employment authorization (about 4 months). I have no USA credit so I'm guessing it'll take a year to get an average credit history.

My fiancee has been pre-approved, though the rate is not the best with credit at 680. We are looking at the options of waiting 6 months to a year in which case I will have a job and just started credit though it won't be as good as hers. We will also be married by then. What affect does marriage have on the home loan application? Can we still only use my fiancees credit and ignore my credit rating?

We are worried that being married and with my credit only just being established will have a negative impact on getting a good loan.

Many Thanks for any help!

[snafu]

Welcome to SA. You'll find we're somewhat international with a few participants from various countries. I wonder... What is driving the desire to buy a house? With a score of 680, there is likely quite a bit of debt to income ratio and/or past credit issues. if you and fiancee have saved a significant downpayment for the home purchase, that is a huge factor in getting reasonable mortgage terms.

Worse yet, without a 20% downpayment, you will be required to carry very expense mortgage insurance either straight up or hidden in the terms and conditions. That premium from your pocket only benefits the mortgager. There is no benefit what-so-ever to a homeowner. Some lenders require mortgage insurance extend for the entire term - like 30 years.

Over and above the mortgage, mortgage insurance, monthly payments include interest which is pre-loaded, property tax and often homeowner's insurance is rolled into the required payment. Added to all that, as homeowners, you get to pay for every repair and decor decision. It's always suggested that homeowners set aside 1% of their home's value to take care of unanticipated repairs.

I wish you'd reconsider until you're firmly established in a new country with a new wife, a stable job and 20% downpayment.

[herdjohnson]

To the point of your question, there is no difference. My (now) wife and I bought our house when we were engaged. There was no difference in the home buying process other than how the names appear on the title.

[tripods68]

Hello,

My fiancee (who lives in Texas) and I (in process of emigrating to the USA) are looking into buying a house. I will not have a job when I arrive in the US as I have to wait for employment authorization (about 4 months). I have no USA credit so I'm guessing it'll take a year to get an average credit history.

My fiancee has been pre-approved, though the rate is not the best with credit at 680. We are looking at the options of waiting 6 months to a year in which case I will have a job and just started credit though it won't be as good as hers. We will also be married by then. What affect does marriage have on the home loan application? Can we still only use my fiancees credit and ignore my credit rating?

We are worried that being married and with my credit only just being established will have a negative impact on getting a good loan.

Many Thanks for any help!

It would be a mistake to buy a new house without saving enough towards a new home. It would put too much burden on your fiancée as the only one working and shoulder majority of the expenses. Its best to rent for now for couple of years...you get a job and then try saving up for a house. Until those thing happen, financially it would be a tremendous burden on your soon to be wife.

[Jovanny]

Most banks generally view married couples as one unit. But engaged couples are assessed as individual applicants even if they are applying for a loan together. If you are yet to be married and planning to apply for a loan, don't wait. Your chances of qualifying for a mortgage loan increases at this point.

Also, you can apply for a bigger loan amount when applying as 2 individuals.

[ReallyBoredMan]

Most banks generally view married couples as one unit. But engaged couples are assessed as individual applicants even if they are applying for a loan together. If you are yet to be married and planning to apply for a loan, don't wait. Your chances of qualifying for a mortgage loan increases at this point.

Also, you can apply for a bigger loan amount when applying as 2 individuals.

There are just a few things I would like to clear up.

While it is true that lenders look at married couples as one unit IF they are both applying for the mortgage. If only borrower applies for the loan then the other non-borrowing spouse's credit/debt/income/assets are not taken into consideration. So that comment about the chances of qualifying for a mortgage increases at this point is not true. That is at least the case for loans being sold to Fannie Mae and Freddie Mac, it might be different if the bank/CU will be holding onto the loan OR if it will be sold to a different investor.

The comment about applying for a bigger loan when applying as 2 individuals is true, but only if both individuals are earning income. If only one borrower is earning income, it does increase the amount you can borrow, if anything it could lower the amount you could borrow if there is debt associated with the non-income earning borrower.

I would suggest waiting on getting a mortgage until you (if you are applying with your spouse) and/or your spouse gets a credit score of 700+.

Just to let you know Lenders will take the middle of your 3 credit scores and if there are 2 borrowers they use the lower middle credit score. so for example borrower 1 has 680, 700, 710, and borrower 2 has 680, 690, 700. The 2 middle scores would be 700 and 690, so the qualify credit score would be 690.

Also about putting down 20%. That is always preferable, but it is not required. Our mortgage that includes mortgage insurance is actually less than what our rent was.