If one spouse already owned a home before getting married, if might make sense to refinance the loan. As long as you meet the lender's approval qualifications, you can apply for a refinance if you're newly married.
When
you refinance your mortgage loan, you actually obtain a completely new loan.
The new funds pay off the existing mortgage loan, thus satisfying the terms and
conditions.
Once the refinance loan closes and is funded, you'll begin to make
payments as instructed by the new loan's terms. Mortgage refinances often carry
lower interest rates or can provide a way to borrow against the home's equity
through a cash-out refinance.
The
approval criteria for a refinance loan are very similar to those of the
original mortgage loan. You'll need to earn enough income to support the
payments, have a good credit score and a regular payment history on the current
loan.
The property's value also needs to be greater than the requested loan
amount. This is verified by an appraisal. Being married or the length of your
marriage doesn't necessarily have an impact on your approval.
However,
if the current mortgage is only in your name, adding your spouse can help or
hurt the approval of the refinance loan. If your spouse has good credit and
adds additional income to the picture, it helps.
Conversely, if your spouse's
credit history isn't great, she has a lot of debt or doesn't add substantial
income, it might hinder your chances of being approved.
Refinancing
the mortgage loan is the only way to add your spouse to the loan and make her
financially responsible for the debt. Your lender will also have a deed
prepared to have her name added to the property's title as well. Generally this
is a quitclaim deed.
If you chose to refinance in only your name, your spouse
can still be added to the title with a quitclaim deed. She will hold ownership
rights but not be responsible for the mortgage.
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