Happily Ever After MaybeIts not uncommon for the husband to be the primary earner in a family. Perhaps youre 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 BuyFortunately, 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 husbands, 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 RefinanceIf 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 youll save on interest over the long term.
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