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. You can use our 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.
Watch our Two Person Mortgage Qualification Calculator "How To" videoHow Our Two Person Mortgage Qualification Calculator Works
Although most people think it is easier to qualify for a mortgage with two borrowers, that is not always true. In some 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. Our Two Person Mortgage Qualification Calculator uses the following inputs to determine what size mortgage two borrowers can afford.
Monthly Gross Income. Our calculator uses combined monthly gross income, which is your income before any deductions such as taxes or social security. The higher your gross income, the higher the loan amount you can afford, which is one of the main advantages of two people applying for a mortgage.
Combined Monthly Debt Payments. This figure includes both applicants’ payments for credit cards as well as car, student and personal loans but excludes their current housing expense, such as mortgage or rent. Please input your monthly debt payment and not your current loan 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. If one borrower has significantly higher monthly debt than another borrower, this can limit the mortgage amount they qualify for as co-applicants.
Mortgage Rate. The lower the interest rate, the higher the loan amount you qualify for.
Mortgage Term. The longer your mortgage term, the lower your monthly payment and higher the loan amount you qualify for. This is why most borrowers choose 30 year loans
HOA Dues. If the property you are financing requires homeowners association (HOA) fees then this cost is considered debt and reduces the mortgage amount you qualify for.
Credit Score. When two people apply for a mortgage lenders usually use the lower credit score between the two.
Our Two Person Mortgage Qualification Calculator provides the following key outputs:
Estimated Mortgage Amount Two People Qualify For. Understand the mortgage two applicants can qualify for based on their combined financial and credit profiles.
Loan Payment. Determine your monthly mortgage payment based on the loan two people qualify for.
Estimated Property Tax and Insurance. In addition to your mortgage payment, it is important to consider other expenses such as property tax and homeowners insurance. These costs vary based on property value, location and coverage level.
Total Monthly Housing Expense. This figure includes your mortgage payment plus estimated property tax, homeowners insurance and HOA dues, if applicable. Total monthly housing expense enables you to understand the all-in cost of owning a home.
Qualifying for a Mortgage as Co-Borrowers
What Credit Score Do Lenders Use?
When two people apply for a mortgage as co-borrowers lenders average their middle credit scores -- assuming they have three scores -- to determine their ability to qualify for the loan. If an applicant only has scores from two credit bureaus, the lower score is used to calculate the average score used in their application. 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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Sources
"Mortgage Basics." Know Your Options. Fannie Mae, 2020. Web.