Buying a House Without Your Spouse: How to Make The Best-Informed Decision
Buying a house without your spouse may seem like an intimidating prospect, but it is possible. Couples who are married or in a de facto relationship may find that one partner has the financial resources to purchase a home while the other does not. In this situation, it can be beneficial for the partner with the resources to buy alone. Let's look at why one might want to buy a house without your spouse, and how it might affect your mortgage.
Key Takeaway
The key takeaway of buying a house without your spouse is that it may be a beneficial option depending on several factors. If one partner has the financial resources to purchase a home while the other does not, buying alone can lead to more control over decision making and could potentially result in lower mortgage payments. It's important to weigh the pros and cons of buying a house without your spouse before making a decision. Talking to both a financial advisor and an attorney can help you make an informed choice that works for both parties involved.
Common-Law Vs. Community Property States
Common-law vs. community property states are relevant when one spouse wants to purchase a home without the other. In common-law states, each partner usually retains ownership over assets that he or she brings into the marriage. This means that if one spouse wants to buy a house without the other, he or she may do so without any need to share the ownership of the home with their partner.
In contrast, community property states have different rules. In these states, any assets gained during a marriage are jointly owned by both spouses — including real estate. This means that if one spouse wants to buy a house without the other in a community property state, they may need to get permission from their spouse or agree to share the ownership of the home.
Can I Keep My Spouse's Name Off The Title?
It depends on which state you live in and if you are married or in a de facto relationship. In common-law states, each partner usually retains ownership over assets that he or she brings into the marriage, meaning you may be able to keep your spouse's name off the title without any need to share the ownership of the home with them.
However, in community property states any assets gained during a marriage are jointly owned by both spouses — including real estate — so it may be necessary to get permission from your spouse or agree to share the ownership of the home if one spouse wants to buy a house without the other.
Why You'd Leave Your Spouse Off The Title
Leaving your spouse off the title when buying a house can be beneficial for several reasons. If one partner has the financial resources to purchase a home, it can make sense for them to buy alone. This may allow for better interest rates and/or more favorable terms if only one name appears on the loan documents. Additionally, leaving one's spouse off the title may provide more financial flexibility if they want to refinance or sell down the line without involving their partner's credit history or income in the process.
Finally, in common law states, it allows an individual to retain ownership of an asset they bring into a marriage without having shared ownership of it with their spouse. In community property states, however, any assets obtained during marriage are jointly owned by both spouses and permission from your spouse would likely be needed before leaving them off the title.
Quitclaim Deeds
A quitclaim deed is a legal document used to transfer property ownership from one party to another without any warranties or guarantees. It's typically used when a person wants to give up their rights and interest in a piece of property, or when they want to transfer the title to someone else, such as a spouse or family member. When it comes to buying a house without your spouse, a quitclaim deed can be used to add or remove your spouse later on.
Can I Keep My Spouse's Name Off The Mortgage?
The answer to whether you can keep your spouse's name off the mortgage depends on the state you live in. In common-law states, each partner usually retains ownership over assets that he or she brings into the marriage, meaning you may be able to keep your spouse's name off the mortgage if you are purchasing a home alone.
In community property states, however, any assets obtained during marriage are jointly owned by both spouses so it may be necessary to get permission from your spouse or agree to share the ownership of the home before leaving them off the mortgage. Additionally, there may be other factors that could affect your ability to qualify for a loan without your partner. Here are a few of them:
Your Credit Scores- Your credit scores are an important factor to consider when deciding whether or not to keep your spouse's name off the mortgage. Different lenders use different criteria when it comes to assessing your creditworthiness and overall financial standing, but typically they look at your FICO score, payment history, credit utilization ratio, and other factors. Your FICO score is the one lenders often use to decide whether or not you qualify for a loan.
Your Income- Your income is another important factor to consider when deciding whether or not to keep your spouse's name off the mortgage. Lenders usually look at factors such as employment history, salary, and other sources of income when assessing your ability to repay the loan. If you do not have a stable income, it may be difficult to get approved for a loan without your spouse's help.
Income To Debt Ratios- Your debt-to-income (DTI) ratio is also important when applying for a mortgage. Lenders usually assess your DTI to determine how much of your total income is already being used to make payments on other debts. If your DTI ratio is too high, it could be difficult to get approved for a loan without your spouse's help.
Your Spouse's Bank Accounts- The presence of your spouse's bank accounts can be an important factor to consider when deciding whether or not to keep their name off the mortgage. Different lenders use different criteria when it comes to assessing your financial standing, but typically they look at factors such as average balance, transaction history, account type, and other details relating to the account. For example, a lender may view an account with a high average balance as more desirable than one with a low average balance.
Can I Have My Spouse On The Title Without Them Being On The Mortgage?
Yes, in some states it may be possible to have your spouse on the title but not on the mortgage. In common-law states, each partner usually retains ownership over assets that he or she brings into the marriage, so if you are purchasing a home solely with your own funds, then it may be possible to keep your spouse's name off the mortgage and still include them on the title. Additionally, in community property states any assets obtained during marriage are jointly owned by both spouses.
So depending upon how much money is coming from each partner's separate accounts it might still be possible to structure the purchase of a home without putting both partners' names on the mortgage. However, it would ultimately depend upon several factors such as credit scores, income levels and debt-to-income ratios. Therefore it is best to speak with a lender who can advise you further before making any decisions.
Can I Include Joint Bank Accounts In My Mortgage Application?
It is possible to include joint bank accounts in your mortgage application, depending on the lender's criteria. Most lenders will look at factors such as average balance, transaction history, account type, and other details relating to the account when evaluating a loan application. Having a joint bank account may be beneficial since it demonstrates that both partners have access to shared assets.
However, each lender has their own set of requirements and it is important to discuss your specific situation with them before including joint bank accounts in your application. Ultimately, the decision of whether or not to include joint bank accounts in a mortgage application should be based on the lender's criteria and advice from a financial professional.
Conclusion
Buying a house without your spouse can be complicated and it is important to understand the implications of taking on such an endeavor. If you decide that this option is best for you, make sure to speak with a financial professional who can provide advice tailored to your specific situation. Additionally, consider all factors such as income levels, debt-to-income ratios and credit scores before making any decisions. By weighing all options carefully, you will have more confidence in knowing that buying a home without your spouse was ultimately the right choice for you.
