Two Person Mortgage Qualification Calculator
Use our Two Person Mortgage Qualification Calculator to determine what size mortgage two people qualify for based on their combined monthly gross income and debt expenses. In some cases it can be easier for two people to qualify for a mortgage because the combined income for both applicants is higher. Typically, the more money you make the higher the loan amount you can afford. In other cases, it can be more difficult for two people to qualify for mortgage if one of the borrowers has high monthly debt payments or a low credit score. Too much debt expense can limit how much mortgage you can afford while a low credit score may mean you pay a higher interest rate, which also reduces the loan you qualify for.
You can use our Two Personal Mortgage Qualification Calculator to evaluate different scenarios based on the borrowers' income, debt and credit profiles to understand if it makes more sense to apply for a mortgage as joint applicants or as a sole applicant. Please note that this calculator uses monthly gross income, which is your income before subtractions such as taxes and medicare. This calculator also uses your monthly debt payments such as car, credit card and student loan payments and not your total debt balance. For example, if you make a $300 monthly payment on a student loan with a $7,500 balance, you include $300 in the total monthly debt payment figure. Also, when two people apply for a mortgage lenders usually use the lower credit score between the two.
The interest rate and loan length also impact how much mortgage two people can afford. The higher your rate and shorter your loan, the lower the mortgage amount you qualify for. In addition to showing you how much mortgage two people can afford, this calculator also shows you monthly housing expense including your mortgage payment, insurance and property tax, to help you understand the total monthly cost of owning a home. We also offer a version of this calculator that does not require personal information.
Monthly Housing Payments
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Qualifying for a Mortgage as Co-Borrowers
What Credit Score Do Lenders Use?
When you apply for a mortgage as co-borrowers lenders usually use the lower score between the two borrowers to determine your ability to qualify for the loan. Your credit score impacts your mortgage rate and what size mortgage you qualify for. Our two person mortgage qualification calculator enables you to understand how your interest rate affects what size mortgage you qualify for. The lower your credit score, the higher your interest rate. Borrowers should check their credit score six-to-twelve months before applying for a mortgage to identify and correct any issues. Joint applicants should also be sure to understand their co-borrower's credit score as you cannot rely solely on your own score no matter how high it is or how strong you are as a mortgage applicant.
Monthly Debt for Co-Borrowers
Lenders consider monthly debt payments for both applicants to determine what size mortgage you can afford. In some cases borrowers may have debt payments, such as for a credit card account, that their co-borrower is unaware of. A higher than expected monthly debt payment figure reduces the mortgage amount you qualify for. It is in co-borrowers' best interest to disclose all of their debts to each other as this information is revealed when the lender pulls credit reports for both applicants. Additionally, sharing this information early in the process provides the opportunity for borrowers to pay down their monthly debt which improves your ability to qualify for a mortgage. Use our two person mortgage qualification calculator to determine how your combined monthly debt expenses impact the mortgage you can afford.
Monthly Gross Income for Co-Borrowers
The positive about applying for the mortgage as co-borrowers is that lenders also use gross income from both applicants to determine how much mortgage you can afford. The higher your combined monthly gross income, the larger the mortgage you qualify for. Even if one borrower makes significantly more money than the other borrower, every dollar counts and the extra income may help you qualify for the loan amount you need to buy the home you want.
Applying for the Mortgage as a Sole Borrower
If for some reason you decide it is better to apply for a mortgage as a sole borrower instead of as co-borrowers you can always add the other person to the property title after the mortgage closes. For example, if your co-borrower has a low credit score or high monthly debt you may be better off applying for the mortgage as a sole applicant. In this scenario the sole borrower must qualify for the mortgage solely based on his or her credit score and personal financial profile. When the mortgage closes, the other person is added to the property title so while the mortgage is only in one borrower's name, both people own the property.
What if One of the Co-Borrowers Already Has a Mortgage?
Lender consider all debts for both borrowers when two people apply for a mortgage as co-applicants. If one of the borrowers owns a home then the monthly mortgage payment for the property is included in the applicants' debt-to-income ratio. The higher your debt expense, the lower the loan amount you qualify for. If the borrowers make enough combined income then it may not be an issue but they must demonstrate the ability to afford the mortgage payments plus property tax and insurance for two homes, which can be challenging.
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