Not putting my wife on the mortgage

[nawhite]

My wife and I are first time homebuyers. We both work but I have a much higher income, much less student loan debt and a much higher credit score than my wife (slowly but surely we're improving all of these, they just wont be where we want them by the time we plan to buy). We combine finances for everything and are both at the same place mustachianism-wise. When looking to get pre-qualified for mortgages, the broker said that they look at the worse credit score of the couple so I had them run it for just me. I qualified for significantly more than what we are looking to spend at 3.375% (30 yr conventional) which I'm really happy with.

So now we have to choose whether or not to put my wife on the mortgage or not. I understand that most people need both spouses on the mortgage simply to qualify for the amount of house they want but that isn't a problem for us. What problems are there with it being in just my name?

Currently we're thinking have the mortgage just in my name. Then for the house title we are on the fence. Either it is just in my name, or it is in both of our names but we both agree to the equivalent of a "post-nup" explaining how the mortgage is a shared expense (I think we are leaning towards the second option right now).

What are we not thinking of?

[arebelspy]

You can still take title in both names even with the mortgage in one name, though they may not want to see that.

There can be advantages to only having one person on the mortgage, if you're getting more mortgages later (though many lenders look at both even if only one person is on the previous mortgage(s), especially if you file jointly).

[nawhite]

You can still take title in both names even with the mortgage in one name, though they may not want to see that.

The question is should we want the title in both names even if the mortgage is only in one? Also who may not want to see that? The bank/mortgage company?

[Spork]

My first question would be:  are there legal advantages/disadvantages to not putting her on the title?  (That's likely to vary by state.)  You would want to make sure the title passes clearly to her in case of your untimely demise.  If you're in a community property state, it probably doesn't matter (but still might be a bit of a PITA).

We always have both of us on everything.  I'm relatively certain she won't run off to Mexico with pool boy.

[KingMe]

I doubt the lender would want an owner who is not liable for the mortgage. I think it could affect its ability to foreclose. What you could do is close on the mortgage and house and subsequently pay a few hundred dollars to get it re-titled to you both as husband/wife ("in the entireties") or as joint tenants.

I had my house re-titled after I got married and it was a nonevent as far as the lender went. I don't think they knew or cared. However, when we subsequently refinanced, it mattered. This approach worked in my jurisdiction. Whether standards or laws are different for youI have no idea.

With interest rates so low, you wouldn't refinance anytime soon under most circumstances so this may be a way for you to accomplish your goals.

[honobob]

The lender will only title the property to the qualifying applicant. Immediately afterward you can add the spouse and the lender won't care. Spouse can deed back to you for refi if necessary. In community property states you would want title in CP for 100 per cent.basis step up.

[MrsPete]

I can share the story about our first home, which admittedly we purchased 25 years ago -- I wouldn't swear that everything's still the same today:

We bought our first house the week before we were married; thus, my husband ALONE bought the house.  We did this at our real estate agent's suggestion:  With his income ONLY we qualified for a state program /special interest rate for first-time homebuyers.  If my income had been included, we'd not have qualified.  If we'd shopped for the house AFTER we were married, we'd have been forced to include both salaries.  It was pure luck that we fell into this possibility. 

Here's the rub: 

We live in a "community property state", which means that anything obtained after marriage is legally the property of both parties.  Ditto for debts:  Debts obtained after the marriage are the responsibility of both spouses. 

SO . . . that house was HIS.  Yes, I helped pay the mortgage, but IF we had divorced, he could've taken the house all for himself because legally it was an asset he brought into the marriage, not something we obtained together.  As such, this was a chance-y thing to do. 

CAN YOU buy a house without putting your spouse on the mortgage?  I don't know.  I suspect that answer would vary by state, and I'd suggest you ask your bank or mortgage lender. 

[Self-employed-swami]

I'm in Canada, so the laws are a little different.

I bought our house, after we were married.  I am alone on the mortgage, and on the registered title.  However, since it was bought after we were married, he is legally entitled to 1/2 the house, should we split (minus the downpayment I put in, that came from separate funds, as stipulated in our prenup).

[b_girl]

We had the same situation on our last two purchases because of a bank screwup that dinged dh's credit. Mortgage was in my name and house in both our names. There was no problem with who was on mortgage vs title. It depends on your marriage of course but in our situation there is no question of this being our house. My dh's maint work alone has added so much value to the house and saved us so much money beyond the mortgage payment. Who's name that is on the mortgage is just a convenience to get a lower interest rate.

[Zaga]

My name's not on the house, but is on the home equity loan.  I don't know what the rules are though, or why that worked.  My husband did bring the house into the marriage though.

[foobar]

My experience is that it was no problem to have the mortgage in one name and the title in both. This probably depends on the state. Might ask before having to do more paper work.

The lender will only title the property to the qualifying applicant. Immediately afterward you can add the spouse and the lender won't care. Spouse can deed back to you for refi if necessary. In community property states you would want title in CP for 100 per cent.basis step up.

[Insanity]

Definitely check with the state to see what is required.  Even though I had purchased my townhouse before I was married, my wife was required to sign off on the sale of it.

[SnackDog]

Suggest you talk to an attorney about setting up a revocable living trust and using it as the title name for all your property. Same goes for beneficiary status of all assets.  You can either be trustee or co-trustee with your wife.  The cost is minimal, benefits are tangible when you die and setting it up early on just makes it all easier.

[samustache]

We did this (in AZ). Got the loan/title in my name only, then did a quit claim deed after all the dust settled to put my wife on. Since then she's got some credit history and we've got a new house/loan in both our names.

http://en.wikipedia.org/wiki/Quitclaim_deed

[nico demouse]

We did this (in AZ). Got the loan/title in my name only, then did a quit claim deed after all the dust settled to put my wife on. Since then she's got some credit history and we've got a new house/loan in both our names.

http://en.wikipedia.org/wiki/Quitclaim_deed

Yes, we did this too. His credit was better, mine not so much. Bought the house in his name, his credit. Shortly afterwards did the quit claim deed so that both of our names were on the title. Refinanced later, no issues.

[Daleth]

We never put both of us on the mortgages (we have bought two houses to live in together, plus several investments). What we do is, one of us buys it and gets the financing, and then after closing we go to a notary (you would need to go to a lawyer on top of the notary--I am a lawyer) and whichever one of us bought the house then signs it over from him/herself to both of us "as tenants by the entireties," taking it subject to the existing mortgage. Here's why we do it that way:

- Tenancy by the entireties (which isn't, I don't think, available in all states, so check yours) protects the house from the creditors of either one of us. The only creditors who could possibly have a chance at getting the house are (1) the mortgage holder or (2) creditors of both of us--in other words, creditors on loans that we both took out together, or--this is highly unlikely--people who manage to sue both of us for the same thing. Like, if we both did something together that caused them harm and they sued both of us, and won, then they might be able to get the house. NO ONE ELSE can touch it. You can own a house this way if you're *married* and if you either buy it together OR the person who buys it signs it over to the couple.

- Buying properties this way gives us flexibility. Husband wants to go back to school? He goes back to school. Wife got laid off, and now has only been in her new job for two months? No problem. We can still buy an investment property if the opportunity arises and we're otherwise financially okay, because our approach to buying investment properties doesn't require *both* of us to qualify for the loan.

- Having only one of us on the mortgage means the mortgage only shows up on one of our credit reports. I see no reason why our credit reports should make it look like, for example, BOTH of us have a $2500/mo mortgage payment when it's actually the same payment and we're both paying just a share of it. What if one of you wants to buy a car just for themselves? They might not qualify if all the mortgages are on both spouses' credit reports, because it will look like they have much more debt than they do.