Whether you want to leave your spouse off the mortgage for a particular reason or you want to buy your own home outright, there’s merit to pursuing homeownership as a solo buyer. Depending on your personal situation, only having one spouse on the mortgage may be the best option.
Learn more about what that process looks like and why you may want to consider it before diving into home ownership as a couple.
Can I Buy A House Without My Spouse?
To put it simply, you absolutely can. A married couple can apply for a mortgage under only one of their names and there are plenty of valid reasons why they may consider doing so.
Leaving Your Spouse’s Name Off The Home Title
The title is a document that states who rightfully owns the property. It doesn’t have much to do with the mortgage itself, as the focus there is who will be paying back the loan.
You can put your spouse’s name on the title without putting them on the mortgage. This way they share ownership of the home but aren’t legally responsible for making payments toward the mortgage.
You may consider leaving your spouse’s name off the title as well if you:
– Kept your finances separate and you’d like to continue doing so
– Want to protect your assets from a spouse who has a poor credit history
– If you would like to have full control over transfer of ownership in the future (for example, if you have children from a previous marriage)
A quitclaim deed allows you to transfer ownership of a property from one person to another. If you choose to leave your spouse’s name off the home title, you can always use a quitclaim deed to transfer full ownership of the property to them.
This same process occurs in a divorce, where one party can use a quitclaim deed to cede ownership of the property to the other party. It can also be used to pass property to family members should the need arise.
Reasons You Might Keep Your Spouse’s Name Off The Mortgage
Regardless of your reason for leaving a spouse off the mortgage, there are a few things you should keep in mind before making any big decisions about who will be responsible for paying back the loan.
If you’re assuming the bank will take the higher of your two credit scores or even calculate an average between both of your scores, you’d be wrong. The bank will notice if your credit score is much lower than your spouse’s and it could affect your ability to get the best rate possible.
If you know your spouse has a low credit score, leaving their name off the mortgage may qualify you for better options. You may not qualify for these options if their credit score was factored in.
Sources Of Income
When it comes to applying for a mortgage, the bank will likely want to see 2 years’ worth of tax returns, 2 years’ of T4s (pay stubs) and 2 months’ worth of bank statements. If your spouse doesn’t have the necessary documentation the bank will require, you may want to consider leaving them off the mortgage.
If they lack provable income and are carrying debt, they could throw off your debt-to-income ratio, which would keep you from qualifying for a loan at all.
Assets In Your Spouse’s Name
If you pursue a mortgage without your spouse, any bank accounts or assets solely in your spouse’s name will not be useable during the mortgage application process. Before you pursue a solo mortgage, make sure you have the necessary assets and accounts that showcase your ability to manage money responsibly.
Handling Joint Bank Accounts
When applying for a mortgage, the bank wants to see that you have the necessary cash to pay your down payment, closing costs, lawyer fees and more. If you have a shared bank account, this can still be used as both of your names appear on the account. All the bank needs to see is that you have access to the money and can use it to pay your mortgage.
There are plenty of reasons why leaving your spouse’s name off the mortgage may be the best option for your personal situation. It may assure you get access to better rates/terms and could also open the possibility of unique perks for being a solo buyer. If you want to learn more about mortgages and how they differ when applying alone or as a couple, our team can help!