Women And Mortgages: Special Needs


Think positive... Look on the bright side… Trust your man… Take care of your family. Authority figures, parents and society in general tend to encourage girls to grow up into women who don’t dwell on the negative, worry about the future, think independently or look out for their own interests. Unfortunately, this may lead you into financially dangerous waters—especially when it comes to your home mortgage.

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Happily Ever After… Maybe

It’s not uncommon for the husband to be the primary earner in a family. Perhaps you’re a stay-at-home mom, or only working part-time so that you can be home for the children. Whatever the reason, this dynamic may lead the bank to leave your name off the mortgage promissory note. As a result, you have no recourse against a foreclosure should your marriage end, your husband die or if he becomes too ill to manage the household finances. Because you are not under legal obligation to repay the mortgage, you may not negotiate a modification or a refinance if you fall on hard times. All you can do is walk away.

Proactively Ready To Buy

Fortunately, there are things you can do to prevent this potential devastation. If your family is preparing to buy a new home, now is the time to ensure that your name is included on the promissory note, as well as on the mortgage paperwork and deed. This will require that the lender consider your income and debt, as well as your husband’s, when qualifying the loan. If you worry that your individual credit score is too low for mortgage approval, you may want to delay your purchase until you can improve the situation. The major ways are to pay down debt and correct any outstanding credit report errors. Taking the time to address the issue now is better than finding yourself without a home, should something untowardly happen later.

Considering A Refinance

If you and your spouse already own a home and your name is not on the note, your only option is a refinance. The bank will need to consider both of your incomes and debts when approving the loan. Refinances also require the payment of closing costs and fees. Fortunately, in a low interest-rate environment, the short-term costs of this refinance may be more than offset by the money you’ll save on interest over the long term.

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On Your Own Again

Divorce happens. Accidents happen. You may eventually be single again. Should you decide to buy a new home or refinance the current mortgage, make sure you shop around for the best rates. A 2006 study conducted by the Consumer Federation of America showed that women were 32 percent more likely to end up in a subprime mortgage than men. A subsequent report by Florida Atlantic University published in the Journal of Real Estate Finance and Economics attempted to explain this phenomenon. The conclusion? Women listen to friends’ recommendations—men shop around. Eleanor Roosevelt once said, “A woman is like a tea bag; you never know how strong it is until it’s in hot water.” Be smart about your mortgage, and you can withstand any financial hot water that life throws your way.

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