Buying a Home with One Income: Can You Do It?

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When applying for a mortgage, if you’re married or intend to get married and are considering purchasing a home, you typically combine your income and credit scores. However, you might be wondering if it’s possible to purchase a home with just one partner’s name on the mortgage.

The short answer is yes. A married couple can apply for a mortgage under only one name. We have answers if you’re thinking about getting a mortgage without your spouse or if you’re curious as to why a couple would take this route.

Hey there, house-hunting heroes!

If you’re dreaming of owning your own place but only have one income to rely on, don’t despair! Buying a home with a single income is absolutely achievable, and we’re here to guide you through the process

Let’s dive into the world of one-income mortgages and equip you with the knowledge and tips you need to make your homeownership dreams a reality

The Short Answer: Yes, You Can!

The good news is that single-income borrowers can qualify for mortgages and purchase homes. However, it’s important to understand that lenders will scrutinize your financial situation more closely compared to dual-income applicants.

Here’s what you need to know:

  • Credit Score: A stellar credit score is crucial. Aim for a score of 740 or higher to secure the best interest rates and loan terms.
  • Debt-to-Income Ratio (DTI): This ratio measures how much of your gross monthly income goes towards debt payments. Lenders typically prefer a DTI below 36%.
  • Down Payment: A larger down payment can significantly improve your chances of approval and reduce your monthly mortgage payments.
  • Savings: Having a healthy emergency fund demonstrates your financial stability and ability to handle unexpected expenses.
  • Pre-Approval: Getting pre-approved for a mortgage shows sellers you’re a serious buyer and can help you negotiate a better deal.

Tips for Success:

  • Boost Your Credit Score: Pay your bills on time, keep your credit utilization low, and avoid opening new credit accounts.
  • Reduce Your Debt: Pay down existing debt to lower your DTI and improve your financial standing.
  • Increase Your Down Payment: Aim for at least 20% down to avoid private mortgage insurance (PMI) and secure a lower interest rate.
  • Shop Around for Lenders: Compare rates and terms from different lenders to find the best deal.
  • Consider Government-Backed Loans: FHA loans require a lower down payment and may be more accessible for single-income borrowers.

Additional Considerations:

  • Affordability: Carefully assess your budget and ensure you can comfortably afford the monthly mortgage payments, property taxes, insurance, and maintenance costs.
  • Location: Consider buying in a more affordable area or opting for a smaller home to fit your budget.
  • Future Income Potential: If you anticipate an increase in income in the near future, this can strengthen your application.

Remember, buying a home with one income requires careful planning and financial discipline. By following these tips and working with a knowledgeable mortgage lender, you can increase your chances of success and achieve your dream of homeownership.

Please contact us at any time if you have any questions or require additional assistance. We are here to guide you through the entire house-buying process and assist you in making wise choices at every turn.

Happy house hunting!

P.S. Check out our additional resources below for more information on single-income mortgages and home buying tips.

Additional Resources:

Disclaimer: The information provided in this article is for general knowledge and informational purposes only, and does not constitute professional financial advice. It is essential to consult with a qualified financial advisor for any specific financial decisions or guidance.

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 mortgage indicates who is in charge of repaying the loan, while the name on the title establishes who is the property’s owner.

Because their spouse has a bad credit history, some couples choose not to list their partner’s name on the house title in order to keep their finances separate, manage their life estate themselves, or shield their property from creditors.

Can I add my spouse’s name to the title at a later time?

You can use a quitclaim deed to add your spouse’s name later. A quitclaim deed is a type of deed that transfers property between parties. It is commonly used to add a spouse to a title, remove a spouse following a divorce, or transfer ownership to family members.

Can I Use My Spouse’s Income On The Loan So I Get Approved? (First Time Home Buyer Tips and 2023)

FAQ

Can a couple buy a house with one income?

Whether you’re a solo homebuyer or a married partner qualifying on just one income, you need to be prepared for the financial responsibility of home maintenance expenses. Before buying a home, aim to save an amount equal 1-4% of what you anticipate spending on the purchase.

Is it hard to get a mortgage with one income?

It may seem difficult to get a mortgage on your own, but many people purchase a home as a single buyer. Thanks to low-down-payment programs, you can more easily get a mortgage on your own without having to save a large amount of money.

Do you need two incomes to buy a house?

It doesn’t always take two incomes to buy a home Whether you have a family or partner cohabitating with you. or plan to live solo, there’s a lot to think about. Don’t rule out buying a home on a single income. Learn the facts and what you can afford. Work to improve your credit-worthiness.

Can I use my wife’s credit score and my income to buy a house?

In addition to credit scores, lenders will look at your income to see if it’s high enough to qualify for the loan you’re seeking. If your income isn’t high enough to snag that mortgage, and you need your spouse’s income factored into the equation, then you’ll have to apply for that loan jointly.

Can you get a mortgage with two spouses?

If you’re part of a two-income household, getting a mortgage with both spouses usually means you’ll qualify for a larger home loan. However, if your spouse isn’t on the loan with you, your lender can’t consider your spouse’s income when determining how much you’ll qualify for.

Can a married couple get a mortgage without their spouse?

The short answer is “yes,” it is possible for a married couple to apply for a mortgage under only one of their names. If you’re planning to get a mortgage without your spouse, or if you’re just wondering why someone would do this, we’ve got a few answers.

Can I qualify for a mortgage with only one income?

Take time to add up your monthly obligations and do the math. Knowing your debt to income percentage ahead of time will help you determine whether using only one income to qualify is an option for you. If you still have questions about whether you can qualify for a mortgage using only one income, give Homestead Financial Mortgage a call.

Should you apply for a mortgage with only one partner?

This is another instance when applying for a mortgage using only one partner’s income and credit score may be the best option–as long as your debt load is manageable. Mortgage lenders have many guidelines they must follow when determining whether to make a loan to a prospective homeowner or not.

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  3. How Does Capital One Determine Your Credit Limit?
  4. Demystifying Your Credit Score: The 5 Key Factors That Determine Your Financial Fate

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