When buying a home as a couple, your credit scores, income, and existing debt all play a major role in mortgage approval and loan terms.Lenders review each person’s credit separately, use the lower score for qualification, and consider your combined debt-to-income ratio if applying jointly.

How to Financially Prepare for Buying a Home Together

Whether you’re applying for a joint mortgage or deciding if one partner should apply solo, it’s essential to plan ahead.When buying a home, align your finances, and communicate clearly.

Buying a home is a significant milestone.Beyond the excitement of finding the perfect space to build your life together lies a complex financial journey that requires careful planning and open communication.

This guide explores the financial aspects of buying a home as a couple, addressing common misconceptions and providing practical advice to help you navigate this process successfully.We’ve teamed up with Carla Rasetta, an expert mortgage broker, to break down some of the finer points and help you prepare for a smooth homebuying journey.

Do Couples Combine Credit Scores When Buying a Home?

No, credit scores are not combined.When applying for a mortgage together (a joint mortgage), lenders review both individuals’ credit histories.

“When two people apply for a home loan, the lender pulls credit scores from all three credit bureaus for each person.They take the middle score from each of you—not the highest, not the lowest.

But here’s the key part:

They use the lower of those two middle scores to decide

– Carla Rasetta-

That means if one partner has excellent credit and the other has some dings on their report, it could impact your application more than you’d expect.

Before applying, pull your credit reports to know where you both stand.You can check your credit report for free annually here: Annual Credit Report.com – Home Page

Should You Apply Jointly or Solo When Buying a Home?

That depends.Not every couple chooses to apply for a mortgage together.Depending on your financial situation, it might make sense for only one partner to apply for the mortgage, especially if one has significantly better credit or a stronger income.

Pros of Applying for a Joint Mortgage:

Cons of Applying for a Joint Mortgage:

If you’re not married, speak with a real estate attorney to decide how to hold title and split responsibilities.

This helps avoid disputes and protects both parties.

How Does Debt and Income Play a Role?

Lenders use an important measurement called your debt-to-income (DTI) ratio to determine how much home you can afford.This includes all your monthly debt obligations (i.e.car payments, student loans, credit card debt) compared to your gross monthly income.Here’s what our expert mortgage broker Carla, had to say about this.

“If you’re applying together, both incomes, and both sets of debts, are considered.

Lenders use your debt-to-income ratio (DTI) to determine how much house you can afford.

It compares your monthly debt payments to your gross monthly income.

If your DTI is too high to qualify, one common solution is to look at installment loans like car loans or personal loans.

This can help reduce your DTI and improve your chances of qualifying for a mortgage.”

-Carla Rasetta-

ACCC Tip: Sit down together and list all of your monthly debts and sources of income.Use online calculators to get a ballpark DTI ratio, or ask your mortgage professional to help you run the numbers.

Budgeting for Down Payment and Closing Costs

There is more to buying a home than just the purchase price so you will need to plan for more than just your monthly mortgage.Together, you’ll need to save for:

ACCC Tip: Some couples choose to split costs 50/50, while others contribute based on income or assets.There’s no one-size-fits-all rule, what matters is open communication and a shared plan.

Talk About the “What-Ifs”

It’s not the most romantic conversation, but it’s an important one: what happens if the relationship ends, or one person wants to sell the home? Consider creating a cohabitation agreement or working with a lawyer to draft a simple contract that outlines how the home will be handled in different scenarios.

This can save a lot of stress later on and ensure that both parties are protected.

Buying a Home – Consider & Reconsider Everything about Debt & Credit in the Process

Buying a home together is an exciting step, but it’s also a big financial commitment.The best thing you can do is be transparent with each other and with your mortgage team every step of the way.

“Starting the process at least 12 to 6 months prior to when you would to start looking for your dream home allows you enough time & preparation to build the best financial foundation for when you want to hit the ground running.Having a mortgage partner in your corner is a critical part of a successful home buying experience.You want work with someone who will cover everything in great detail and gives you a eyes wide open understanding of what to expect for preapproval limits, payment expectations, and any tricks or solutions to make you a stronger homebuyer.

Buying a home is one of the largest financial moves you’ll make in your life, make sure you have open communication with a lender who takes the time to hold your hand throughout the process.”

-Carla Rasetta-

Before you sign any paperwork or fall in love with a house, take your time to:

With the right prep, your journey to homeownership can be smooth, rewarding, and stress-free.

Frequently Asked Questions

Do couples need to have the same credit score to buy a house together?
No.Lenders evaluate both applicants’ credit, but use the lower of the two middle scores for mortgage decisions.

Can one person be on the mortgage and both on the home title?
Yes.It’s possible for only one partner to be on the loan while both are listed as homeowners on the title.

What DTI ratio is considered good for mortgage approval?
Ideally under 36%, though some lenders allow up to 43%.Lower is better for approval and rates.

What if one partner has significant debt?
Consider applying solo or working with a credit counselor to reduce that debt before applying jointly.

Need Help Managing Debt Before Buying a Home?

If credit card balances or other debt are standing in the way of your homeownership goals, ACCC can help. We’re a nonprofit credit counseling agency that helps couples:

If you’re struggling to pay off debt, ACCC can help.

Schedule a free credit counseling session with us today. 

This article was co-written with Carla Rasetta, a licensed mortgage broker and owner of MBC Mortgage.Carla has 25 years of experience in the banking world, helping couples and individuals achieve their homeownership [email protected] follow me on Instagram carla_mbcmortgage.