If you’re buying home, it sometimes makes sense to apply for joint financing. Joint financing refers to a scenario in which you and another person apply for a mortgage loan together; you’re both responsible for repayment, and if anything goes wrong, you’re both exposing your credit to damage.
Joint Financing When You Buy a Home in Tampa Bay
In many cases, couples choose to finance a home together. However, people in other types of relationships also decide to co-finance new homes.
The way you view each of these joint financing facts will determine whether applying with someone else is a good idea or a bad idea.
- The lender will consider your combined income to determine whether you qualify for a loan. If you each make $50,000 per year, the lender will count the total income; in a two-person application, that’s $100,000 per year.
- The lender will consider both of your credit scores and payment histories. Because the lender will count on both of you to repay the loan, they’ll consider the person with the lower credit score or less-timely payment history to be a weak link. In many cases, when one person has poor credit but the other person’s is good, the bank will charge a higher interest rate than they would if only the applicant with good credit was borrowing.
- Legally, everyone whose name is on the mortgage loan is responsible for making the payments – and everyone will suffer equally if the payments aren’t made. That means if one of you stops contributing to the mortgage payments, the other is still responsible for paying the full amount. If you fall behind on payments, you could face foreclosure or negative marks on your credit report.
Are You Moving to the Tampa Bay Area?
If you’re considering a move to or a move within the Tampa Bay area, call us at 727-584-8480 or at 813-961-6000. You can also get in touch with us online if it’s easier. Just tell us what you’re looking for and we’ll get right to work to find you the right home for your needs.