Your Mortgage Company May Look at Your Spouse’s Debt
When your mortgage company approves you for a loan, they look at your debt-to-income (DTI) ratio, which is the percentage of your gross income that goes toward debt. Your DTI can have a huge impact on your home loan.
If one spouse has a lot of debt, you might consider leaving them off the mortgage to decrease your DTI ratio. However, if the home is in a community property state and you’re getting a FHA or VA loan, both spouses’ debts will be taken into consideration.
So what’s a community property state? In a community property state, all assets and all debt belong to both spouses. Says Lindsay, “The phrase, ‘What’s yours is
mine and what’s mine is yours’ is actual law in these states.” There are currently nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. If you live in one of these states and you’re getting a FHA or VA loan, your mortgage company will look at the debts of both spouses.
Well, there you have it. Are you and your spouse considering a one-spouse mortgage? Speak with a home loan expert or leave your questions in the comments section below!
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