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Can I get a better mortgage rate if I apply without my husband?

If your credit scores are very different, you may be better off applying alone.

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Question:

If I have better credit than my husband, will we get a better mortgage rate if I apply alone?

Answer:

If your credit scores are markedly different, you may be better off applying for a mortgage alone, our experts say.

"Interest rates are typically driven off of FICO scores and loan-to-value ratio," says Brittney Baldwin, vice president of National Cooperative Bank (a Brick sponsor). "If you have two borrowers on the application, the lower score is the one that the interest rate is going to be based off of. If there is a large discrepancy in the FICO scores, then it may be best to try and qualify alone to qualify for the best interest rate."

FICO scores, which are based on your credit reports, can range from 350 to 850; the ideal range for qualifying for a good mortgage interest rate is a score of 720 or above, according to Zillow. A score of below 620, meanwhile, is considered "poor," so you and your husband should compare scores to determine whether you'll get better rates applying for a mortgage on your own. You can check your FICO score here

Your loan-to-value ratio, meanwhile, is calculated based on your mortgage amount and the estimated value of the property. Many lenders will offer better loan terms if your LTV is less than 80 percent, according to Investopedia

If you and your husband are planning to a buy a co-op, you may encounter challenges in applying for a mortgage without him.

"Some co-ops will want both names on the stock and lease and both names on the mortgage," says Deanna Kory, a broker with Corcoran. "So make certain to speak to an agent who will ascertain what the building is looking for if indeed you are purchasing in a co-op. And of course if the situation is that one of the couple has a ding on their credit score and that couple is buying in a co-op, then understanding whether or not that will pass a co-op board with a letter of explanation is very important." 

If you have no choice but to apply together, you may want to take some time and try to improve your husband's credit score before speaking to a lender, to lock in better rates.


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