Pros and Cons of a Joint Mortgage for First Time Home Buyers!

here's the thing joint mortgages aren't

new in fact a lot of married couples

have used them for many many many years

to get approved for a mortgage to be

able to buy their family home now what

is new is that more and more first-time

homebuyers are using them even if

they're not married so they're getting

these with their significant other and

there's certainly pros and cons that

should be considered when getting a

joint mortgage so in today's episode

we're gonna talk about the pros and cons

of a joint mortgage that help you make a

smart well informed decision and if it's

right for you my name is Andrew Finney

your real estate if you need help

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notified of the next one okay team let's

take a closer look at this if you're

married or even if you have a

significant other you're probably really

thinking should one of us be getting

approved for this mortgage or should

both of us be going on this mortgage and

what are the pros and cons that we

should be considering to know if this is

going to be a smart decision for us so

let's go ahead and get into it with a

pro now obviously a pro is if you have

both incomes going into a mortgage

application you're gonna be able to

improve for more home that could be the

difference of getting the school zone

that you want the bigger a house that

you may want or being on the side of

town that you would like to be on or

perhaps simply a better view now there

are other trade-offs with that because

with more money comes a more buying

power but also what has to be factored

is the fact that the lender still going

to look up both of your debt-to-income

ratios with an overall balance of money

so let's say that your combined incomes

were like $10,000 a month very good

money right and let's say your total

debt obligations are 4,000 or 5,000

dollars a month so as a factor of a debt

to income ratio that'd be roughly 40 to

50 percent debt to income ratio but what

if only one spouse let's say the spouse

that earns $6,000 a month only has maybe

a $500 a month debt to income ratio

maybe you can qualify with that amount

to get the home that you want at the end

of the day you need to talk to your

local loan officer and see how this is

gonna play out for you the single

biggest reason that a lot of people

enjoy getting a joint mortgages to

qualify for more of a mortgage so they

can get into the place they want to call

home for many years to come

now joint mortgages do come with some

cons so let's take a look at that first

of all you're gonna have both of your

credit reports pulled and both of the

correct scores might qualify so if you

look at it your

why for mortgage jointly the lender is

going to review your three credit

reports they're going to review your

significant others three credit reports

so a total of six credit reports are

gonna be looked at with the middle

numeric credit scores that must meet the

Linda's qualification standards before

your loan application will be approved

so if your credits really good and your

significant others critically harm the

process of getting a loan pre-approval

or if you can qualify jointly then maybe

you'll have a higher interest rate now

that's a trade-off that you need to be

prepared for and it's a conversation you

need to have if it's in between the

interest rate and getting it to a home

that you really want that's a really

good consideration and a really good

question I have with you and your

significant other and ask yourselves

honestly what's more worth it the house

that you really want at the price that

you can get together or maybe a house

that you can get on with one income and

maybe you get a better interest rate

what's more attractive to you and what's

fitting with your long-term vision

together and where you want to live

that's what you need to consider that's

something that you should be real about

and definitely ask each other the second

con is that both of you are at risk of a

credit damage if something went wrong

with that mortgage now let's say that

your joint mortgage was approved that's

good you got into the house that you

want everything's going along swimmingly

now let's say that something happened

and you missed a payment what's gonna

happen next is that both of your credit

reports are gonna be deemed not just one

so both are gonna be taken into account

both are gonna be dinged on that and if

you default on a joint mortgage that's

something that's gonna follow you both

around even if you got a divorce into

the future and that's kind of a scary

proposition so you need to consider this

wisely and if it's best for you the

third con is that you're both liable for

the debt and even though none of us will

ever plan for a breakup or for a divorce

it does happen and if it does happen and

you're jointly tied to a mortgage loan

with your spouse or significant other

separating that debt after the fact can

be a very tricky process so there's some

different things that you can consider

I'll go ahead and toss them out for

reference so that you're aware of them

in the event that one if you walk away

from the relationship or a divorce has

happened and you guys say hey you know

what if we're married we're done if

we're significant other hate we're done

and you want to get the heck out of

Dodge you're both still gonna be equally

liable for the debt so a mortgage would

still remain on both of your credit

reports and both of your names and tell

a couple of things happened here one

that could happen is that the person

that's keeping the property could

refinance that loan into just their name

that would exonerate the other person

that was on the credit report leaving

them free and clear to move on with

their life and go on their own path

while the other one still has the home

and now the debt is only in their name

the second thing that you can do and

it's pretty common that a lot of people

do whenever these situations occur is

they simply sell the asset the asset in

this case being the house so when they

sell that then they both normally will

split it out 50/50 or whatever was

agreed upon them if they had to get

divorce attorneys or judges involved

then they'll be splitting it out as they

have agreed to do it's important to note

here that it's easier to get a divorce

from a spouse than a divorce from a

creditor I know it sounds a little bit

funny but it is so true so you need to

be ready if you don't need two incomes

to qualify for a particular mortgage

loan it might be a good idea just to

take out one in one name and consider

maintaining the credit independence for

the other person both spouses can still

be on the deed even if only one spouse

is the liable party and the bank doesn't

care who's gonna make the payment so

both of you guys can work it out

together as a couple so I mean it's up

to you if you can qualify for the home

that you want and you guys will be

comfortable with that based upon when

income great if you need both incomes

now at least you know the pros and cons

that you should consider and make sure

that you're making a smart and

well-informed decision at the end of the

day that's right for you okay so now

that you know what you can do with the

joint mortgage and some of their pros

and cons here's what I want you to do

that's what you're thinking about this

episode in the comment section below and

share any experiences that you have with

the joint mortgage and your advice with

us in the comment section below let's

learn and grow together thank you now

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a lifetime for love wealth abundance and

happiness thank you for watching today

team and enjoy an amazing day