Member FDIC NMLS #772685
Vice President - Mortgage Division
Qualifying for a Loan When Your Spouse Has Bad Credit
If your spouse has bad credit, but you’re trying to qualify for a mortgage loan, don’t panic. There are still a few steps you can take to making sure you can take out a loan for the home of your dreams. Here are some of the options you have:
1. Buy the home without your spouse on the loan application.
This option is fairly self-explanatory. If you’re worried about your spouse’s credit score, don’t put him or her on the loan. By doing this, you will receive a far better interest rate than you would have with your spouse’s low credit score. The downside to this is that your spouse’s credit won’t be included in the loan application. Therefore, if you don’t have a large enough income to qualify for the house alone, this won’t be an option for you unless you want to look for a smaller house
2. Deal with the higher interest rate.
If your spouse has a low credit score and you apply together, you will both have a low interest rate. However, some couples choose to just deal with this factor due to the fact that they can use two incomes. You will be able to finance a large down payment with two incomes and hopefully apply for some alternative programs to help with the low credit score.
3. Work on your spouse’s credit score
The last option is to spend some time improving your spouse’s credit score before you apply for a house together. If you really put in an effort, you can improve your spouse’s credit score in as little as one or two months. However, depending on the severity of the credit score, you might need to work on it and hold off on buying a house for a year.