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How to Add Your New Spouse to Your Mortgage

If you own a house and you recently got married or are planning to soon, you and your new spouse may want to share the cost of the mortgage. You might think that you can simply contact your lender and add your spouses name to the mortgage, but the process is actually more complicated than that.

Why Youll Need to Refinance Your Mortgage to Add Your Spouses Name
Any time a change is made to an existing mortgage, a refinancing process is required. Before the lender agrees to add your spouses name to the loan, the company will want to make sure that the two of you will be able to repay the loan. That means you and your new spouse will need to demonstrate that youre both creditworthy.

How the Process Works
Before you try to make any changes to the mortgage, your spouse should request copies of his or her credit reports, check them for errors and dispute any inaccurate information. Then you can contact your lender and explain that you want to add your spouse to the mortgage.

Youll have to fill out an application and submit documentation showing both your incomes and assets. The lender will consider that information, as well as how much home equity you currently have and the type of loan, to decide whether to refinance the mortgage.

Whether you stick with your current lender or apply for a mortgage from a different company, you arent guaranteed an approval just because you were granted a loan in the past. If a lender approves the application, any future mortgage statements will include both your and your spouses names.

Potential Problems
Whenever a mortgage is refinanced, the homeowner(s) have to pay for an appraisal and closing costs. Those could total thousands of dollars that you might not have been expecting to pay.

If your spouse has a low credit score because of high credit card balances, late or missed payments, bankruptcy, or foreclosure, the mortgage application could be rejected. The lender might decide to approve the application but charge a higher interest rate than you had for the initial loan, which could raise your monthly payments. Refinancing the mortgage could also change the payoff date.

Is Adding Your Spouses Name to Your Mortgage the Right Move, Right Now?
When planning a life with your new spouse, its natural to want to share expenses, but things can be complicated if you have different financial circumstances. Before you add your spouses name to your mortgage, make sure you understand how his or her financial situation could affect the terms of the loan. If your spouse has bad credit, it might be a good idea to wait until he or she has had time to bring up the scores before you seek a joint mortgage.

Published with permission from RISMedia.

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Can You Buy a House With a High Income and Low Credit Score?

A mortgage lender looks at several factors when deciding whether to approve a loan application. A lending institution wants to know that a borrower has both the ability and the will to repay debts. If you have a high income and a low credit score, a lender may have reservations about approving your mortgage application.

How a Lender Looks at Income and Credit Score
A lender adds up the costs of housing, car payments, student and other loans, and credit card payments and divides the total by an applicants gross monthly income to arrive at a percentage known as the debt-to-income ratio. Some lenders require a low debt-to-income ratio, while others are much less stringent.

A credit score reflects a persons payment history and use of credit. Someone may have a high income, but that doesnt mean much if the individual spends money frivolously instead of paying bills. A low credit score is a red flag that can cause a lender to think that a loan applicant doesnt know how to handle money responsibly. A person with a low credit score is more likely to make payments late or miss them altogether than someone with a higher credit score.

How to Qualify for a Mortgage With a High Income and Bad Credit
Credit reports sometimes contain errors because information was reported incorrectly, wasnt reported at all, or got mixed up with someone elses information. Youre entitled to receive a free copy of your credit report from each of the three major credit bureaus once a year. Check your reports for errors that could be lowering your scores. If something doesnt look right, dispute it so the mistake can be corrected.

You can also hold off on buying a house and take some time to pay down debt and boost your credit score before you apply for a mortgage. Thatll help you get a better interest rate and avoid paying tens of thousands of dollars in additional interest over the life of your mortgage.

If you want to buy a house soon but are concerned about your low credit score, you can apply for a mortgage through a lender that is forgiving. The Federal Housing Administration, U.S. Department of Veterans Affairs, and U.S. Department of Agriculture offer loans to borrowers with low credit scores. If you have bad credit, you should expect to pay a higher interest rate than someone with a better credit score. Making a large down payment could reduce the loan-to-value ratio and make the loan less risky for the lender, which might help lower your interest rate.

Explore Your Options
Lenders will look at your entire financial picture when deciding whether to approve your mortgage application. A combination of a high income and a low credit score may be a red flag. Work on improving your credit, explore options for borrowers with poor credit, or save as much as possible for a down payment to improve your chance of being approved for a home loan.

This article is intended for informational purposes only and should not be construed as professional or legal advice.

 

Published with permission from RISMedia.

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4 Dog Breeds That Love Urban Living

Its important to consider your lifestyle and living situation before bringing a dog into your home.
Here are four breeds that are suited for city life!

French Bulldog

A daily walk is enough exercise to keep them happy and healthy. French bulldogs will be perfectly content just lounging by your side.

Bichon Frise

This hypoallergenic toy-sized breed is great with children and loves to play games to expend their energy.

Yorkshire Terrier

These little pooches love to play inside and enjoy walks around town.

Boxer

Boxers are perfectly happy living in an apartment; they just need enough exercise. Spend at least an hour with your new jogging partner, and theyll be content.

Published with permission from RISMedia.

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Energy-Saving Tips for Your Kitchen

The kitchen is often considered the heart of a home, where you can feed and gather with family and friends. With all of its appliances, the kitchen is also a prime spot for you to practice energy efficiency and help reduce your utility bills.

For example, simply unplugging smaller appliances, such as your coffee maker, toaster and blender, when youre not using them can prevent them from draining small amounts of power that could add up over time. To further save energy in your kitchen, try these tips from the U.S. Department of Energy for using your dishwasher, refrigerator and other common appliances more efficiently:

Dishwasher

Most of the energy used by a dishwasher is for water heating. Check the manual that came with your dishwasher for the manufacturers recommendations on water temperature; many have internal heating elements that allow you to set the water heater in your home to a lower temperature (120 degrees Fahrenheit).
Be sure your dishwasher is full (not overloaded) when you run it.
Avoid using the rinse hold on your machine for just a few soiled dishes. It uses 3 to 7 gallons of hot water each use.
Let your dishes air dry; if you dont have an automatic air-dry switch, turn off the control knob after the final rinse and prop the door open slightly so the dishes will dry faster.

Refrigerator/Freezer

Dont keep your refrigerator or freezer too cold. Recommended temperatures are 35 to 38 degrees Fahrenheit for the fresh food compartment and 0 degrees Fahrenheit for separate freezers for long-term storage. You can check the temperature using an appliance thermometer.
Make sure your refrigerator door seals are airtight. Test them by closing the door over a dollar bill so its half in and half out of the refrigerator. If you can pull the bill out easily, the latch may need adjustment, the seal may need replacing or you may consider buying a new unit.
Cover liquids and wrap foods stored in the refrigerator. Uncovered foods release moisture and make the compressor work harder.
Regularly defrost manual-defrost freezers and refrigerators; frost buildup decreases the energy efficiency of the unit. Dont allow frost to build up more than one-quarter of an inch.

Other Kitchen Tips

Place the faucet lever on the kitchen sink in the cold position when using small amounts of water; placing the lever in the hot position draws hot water even though it may never reach the faucet.
When using a natural gas stove, look for blue flames; yellow flames indicate the gas is burning inefficiently and an adjustment may be needed. If you see yellow flames, consult the manufacturer or your local utility.
Keep stove-top burners and reflectors clean; theyll reflect the heat better, and youll save energy.
Use a covered kettle or pan or an electric kettle to boil water; it’s faster and uses less energy.
Use small electric pans, toaster ovens or convection ovens for small meals rather than your large stove or oven. A toaster or convection oven uses one-third to one-half as much energy as a full-sized oven.

When shopping for a new dishwasher or fridge, look for energy-efficient models certified with the ENERGY STAR label.

Published with permission from RISMedia.