My Spouse Has Poor Credit. Is a Joint Mortgage Out of the Question?

You may be one of those married couples who likes to do everything together, whether it's grocery shopping, decorating for the holidays, traveling, or signing a mortgage. And often, signing a joint mortgage makes sense when you're part of a couple and both work, since you can combine your income for a higher borrowing threshold.

But what if you're looking to get a mortgage and your spouse has really poor credit? Will that make it so a joint mortgage is off the table? The answer is, it depends on how strong your credit score is and just how poor your spouse's is.

When there's a big gap in credit scores

The minimum credit score to qualify for a conventional mortgage is 620. It used to be that if you were applying jointly for a home loan and one of you had a score of under 620, then a joint mortgage was off the table. But Fannie Mae now does things differently. Now, Fannie Mae will take the average score of both borrowers on the loan to determine eligibility.

So let's say you have excellent credit and your score is 780. But let's say your spouse's score is just 580. In the past, that would've excluded you from qualifying for a joint mortgage, because a 580 is below the 620 threshold needed for a conventional loan. But now, you might qualify based on an average score of 680, which is well above 620.

However, let's say your spouse has a 550 credit score and yours is a 670. With an average score of 610, you may not be able to sign a conventional mortgage jointly.

Of course, just because you're able to qualify for a joint mortgage doesn't mean you'll end up with a great interest rate if your spouse has poor credit. So that's something to take into consideration, as well.

Should you just apply for a mortgage on your own?

If you have great credit and your spouse has poor credit, you may decide to try to apply for a mortgage on your own. That way, you might snag a more favorable interest rate on it, resulting in lower monthly payments. However, the problem you might run into there is not having a high enough income to qualify for the loan amount you need.

Let's say you and your spouse are equal earners, bringing home $75,000 a year each for a combined total of $150,000. You might need a $140,000 income to qualify for the loan amount you're looking for. With your joint income, that's no problem. But if your spouse's name isn't going on your mortgage application, then their income can't count toward your eligibility. So you might run into an issue there.

On the other hand, if you earn a high enough salary, then applying solo could be your better bet. If your spouse's credit improves, you could always refinance your mortgage into a joint loan down the line. But applying on your own may be the way to go for now.