Refinancing Questions

by Mary
(Anchorage, Alaska USA)

Ask Kate refinancing questions about adding a spouse: My husband and I are newly married. He has a mortgage on his townhome. We are now trying to get refinancing to lower his interest rate. Should I apply for refinancing on the mortgage with him?

Kate Answers Townhouse Refinancing Questions

Dear Mary,

I'll assume you know if you were to refinance the townhouse with your husband, the home loan also becomes your debt.

In fact, the responsibility for repayment would not be split between your spouse and you. The mortgage payment becomes the obligation of both borrowers.

I mention this because many assume the obligation is not weighed as heavily for co-borrowers.

Refinancing Questions - Qualifying For A Home Loan

Here is what you should know about co-borrowing for a mortgage. A co-borrower can strengthen a loan package and make it easier to obtain loan approval. On the flip side, adding a co-borrower can complicate refinancing.

Here are the 3 main categories to consider.

1. Income
2. Debt
3. Credit History

Monthly income and debts of both loan applicants are added together for qualifying purposes. But credit history is handled differently.

If your credit scores are higher than your husband's, that is good. However if your credit scores are lower, this can result in an inferior interest rate or not being able to refinance the townhouse at all.

I'd ask your mortgage originator if your package strengthens the refinance. Then you will have the facts to make a decision.

You'll also like this refinancing question from Ono who asks about adding his wife as a Mortgage Co-Borrower. My answer sheds more light on the pros and cons of co-borrowing.

Mary, one more thing. I'd like to hear back from you. Let me know if this page was helpful to you. Comment here on Refinancing Questions.

Or Ask Kate another question here.

Best wishes,

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