I'm the sole breadwinner. What are the advantages and disadvantages of adding my wife to the mortgage?
The advantage to adding your spouse to your mortgage would be that her credit profile will have added value based on the length of time she stays on the mortgage and the payments being posted on time. If you divorce, then the lien on the property is already in both your names and holding her responsible for the NOTE would be slightly easier. If you die, the loan does not need to be re structured in order for her to continue making payments. There could be more benefits, however these are the most common I can think of.
The disadvantage would be that her credit profile now has that full payment counting against her. If she gets income and wants to obtain financing for something, they will include the full payment on the property the mortgage is secured against in her monthly obligations. This could cause her to qualify for less or not at all vs if she was not on the loan. Secondly you will need twice as many signatures on your loan docs at closing and sometimes there can be un forseen problems that could slow down the finance process. For example she has a judgment against her that she was not aware of, now that judgment has to be taken care of before the loan can close. If your rate is locked and rates are going up, you could loose your locked rate dealing with problems that could have been avoided simply by not including her on the application since she was not needed to qualify in the first place. | 01.09.14 @ 22:30
Michael covered most of the pertinent areas already, but I'd like to add a couple of major "disadvantages". If your spouse's credit scores are lower than yours, the loan pricing and/or rate may be higher as lenders use the lowest mid-score for all applicants to price loans. In addition, if your wife has debt solely in her name but no income, adding her to the loan will hurt your debt to income ratio, and could even prevent you from qualifying.
Hope that helps!
Ted | 09.01.15 @ 19:23