Multiple states across the country now give gay and lesbian couples the right to exchange vows. Once married, those couples have access to the same programs and benefits as any other married couple, including health insurance and home ownership. Though some couples worry that they cannot easily obtain a same sex mortgage that includes both their names, there are options for those couples. Prior to applying for a mortgage though, they should give some thought to the future.
Apply for a Joint Mortgage
A joint mortgage is really just a loan agreement that has more than one name on the application. Have you ever wondered how a parent could buy a house for his or her child? The reason is because they both applied for a joint mortgage. This puts both names on the mortgage and affects everyone involved in the purchase equally. If the house goes into foreclosure, everyone listed on the mortgage will need to appear in court, and that foreclosure will lower the credit score of everyone listed on the application. If you live in a state that does not legally permit same sex marriage, you can still apply for a joint mortgage. The lender won’t ask about your relationship or even how you know each other. A joint mortgage lets both parties share equally in the purchase of a new home.
Use One Applicant as a Cosigner
Experts recommend that couples talk about their finances prior to moving in together or marrying. When one partner has a high credit score and the other has a low credit score, problems can exist. You might also find that your partner has a large number of student loans or a high level of credit card debt that can make your chances of owning a new home difficult. If your partner has a low credit score, you might consider using your name as a cosigner. A cosigner is someone with a higher credit score and a better credit rating. As a cosigner, you agree that if your partner defaults on the loan, that you’ll take over the payments. Applying as a cosigner can also help you improve your partner’s credit score. Every payment that you make by the due date will increase his or her credit score.
Living Together without a Joint Mortgage
What happens if your partner has a significantly poor credit score? With a score below 600, you’ll have an extremely hard time finding any lender willing to take a risk on your loan. Becoming a cosigner for your partner can actually lower your credit rating as well. This shows that you have a large loan attached to your name, which can keep you from obtaining loans later. If you cannot obtain a joint mortgage and worry about how being a cosigner will affect you, you can still live together. When you apply for a home loan, apply under your own name only. The bank won’t ask you about the people living with you and won’t run a credit check on anyone not listed on the loan application.
Looking to the Future
As a same sex couple, it’s important that you look at and think about the future. The future becomes even more important when you agree to put only one of your names on the mortgage. You need to decide what will happen if you break up and who will retain ownership of the home. Many couples opt for a legal contract or agreement that states one of the homeowners will buy out the other homeowner or that both parties agree to sell the home and split any profits made from the sale. Applying for a home loan lets you purchase the perfect home for you and your partner. As a same sex couple, you can purchase a home together with one or both of your names on the mortgage.
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