Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
loan question
We bought our first home six years ago when DH and I were both working. Now I am a SAHM, and DH makes a little less than both of us combined back then.
We're about to start the process again to sell our home and buy a bigger one. How does just having one income impact the loan? Will we not be approved for as much as if both of us were working (we only spent about half what we approved for last time)? Will it be based only on his credit score or both?
I think our interest rate is currently about 5.25%, our house has appreciated (we will walk away with quite a bit of cash after closing costs) and we have additional cash to put down as a downpayment.
Anything else we should consider?
Re: loan question
It will effect the amount the bank will give you for sure. As you do not make anything they can not go off your income. If you have a sizable dp and your DH is making almost as much as you both combined in the past you should qualify for about the same amount of money.
But because of the way interest rates are right now you may qualify for more as the rates are lower then your current rate.
I am not sure how it works credit wise if you both can be on the mortgage, your best bet is to go speak with your bank or a mortgage broker.
I became a SAHM after we bought our first home too just like OP. I was on that mortgage since I was earning an income when we bought. We are buying a new one now and I'm on the loan even though I don't have a job that I get paid for. So, yes, you should be permitted to be a joint applicant even if you aren't earning a salary. If your credit is strong, I cannot see why anyone would object.
I'm not sure if you will qualify for the same or near the amount as you did before. Lending guidelines at banks have tightened up a lot in the recent years. They will look at you husband's debt to income ratio (a comparison of how much he owes to how much he earns). And, without the existence of your income, the DTI may be a higher figure this time around. It all depends on what your other debts look like for credit cards, cars, student loans, etc.
Anyway, your lender can guide you through this. Good luck!
Thanks MommyLiberty!
Our only debt is our mortgage and around $7k in student loans, so that is good.
I am a SAHM and we were just qualified to purchase an investment property. They pulled both our credit scores and took into account all investments that we have (car, retirement, stocks, ect). We also do not have any debt besides our current mortgage. We did have to have the 20% down but I think that is just because it is investment property and not owner occupy.
Talk is cheap. I would call a loan officer at your bank and ask which would be better. Some couples just have one name on the mortgage but both names on the deed.