While leaving the lower score off the application makes practical sense for a high-scoring spouse with an income to match, "the reaction you usually get from the other spouse is that they feel a little hurt," Frommeyer says.
Brokers can ease the emotional sting of exclusion by explaining that even if one person is left off the loan, both members of the couple are still allowed to sign the title, Pitt says.
In certain states, if couples want to leave one person off the loan, it may make sense to buy the house before they get married. Massachusetts, Ohio and Kentucky are among the states that adhere to "dower" or "curtesy" laws. A dower is the portion of a deceased husband's property that a widow is legally entitled to use to support herself and their children. A curtesy is the portion entitled to a widower if the couple had kids during the marriage.
In those cases, a bank may have trouble when the loan-paying spouse runs into financial trouble and wants to sell the house, but the other spouse still has rights to the house. However, spouses sign away their inherent dower/curtesy rights if they sign the legal documents associated with the house. Therefore, in states with dower or curtesy laws, some lenders may require both spouses to sign the loan in case of a foreclosure, according to officials at the Quality Title & Abstract Agency in Eatontown, N.J.
"The problem we run into is when you have a couple that's separated, and one of them leaves the state," says Jerry Collyer, president of the Florida Mortgage Professionals Association and a regional vice president at U.S. Capital. "By signing the security agreements, they're waiving their rights," Collyer says.
The main problem with only one person signing the loan is that the bank considers only one income, which is a problem if the higher credit score doesn't match the higher income. Debt-to-income ratio is a major consideration in issuing mortgage loans. Couples may be able to persuade lenders to soften on the debt-to-income ratio issue if they have significant savings -- and by transferring savings from the account of a bad credit spouse into the account of a good credit spouse.
"People don't often associate savings with credit, but you can't have one without the other," says Rod Griffin, director of public education at the credit information company Experian. "If you don't have savings in place to help you through an economic downturn, lenders will be more concerned about that."
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