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Home Loans First Home Buyer Mortgage

Help with Rising House Prices 2021

Buying a house is supposed to be one of the most important times in your life. However, with rising house prices, many people are left disheartened. The already booming prices have continued to reach new heights. What this means is more grim news for Australians looking for a new house.

Statistics show that more than 60 per cent of Australians own their own home. However, home-ownership rates for people that are aged under 40 are quickly declining. While it may seem easier to simply build a new house, the hardship doesn’t stop there. House prices, in general, are rising, and that includes building prices.

Last year, all Australians were told that there would be a large market drop. Unfortunately, after saying that, the prices soared. Many people seem to think that the prices soaring can be attributed to not enough homes. That just isn’t the case.

house prices 2021

Why we are dealing with rising house prices

People are generally believing that rising house prices equals not enough homes. This has been a common thought process; however, this is completely wrong. It just can’t explain the take off in 2000, the next take off in 2013, and the most recent take off.

We definitely have enough homes. The 2016 census concluded that we had 12 per cent more dwellings than we do households. This statistic is up 10 per cent since 2001. This means that 12 per cent of our houses and apartments in Australia are empty. Usually, they are used as holiday homes, second homes, or they are waiting for tenants.

If there weren’t enough homes available, it would be more than property prices soaring, it would be rentals as well. Instead, rent has barely been moving. It has been growing even slower than wages for around half a decade.

rising house prices

The increase

House prices in Australia haven’t just skyrocketed. To say that is a complete and utter understatement. We have seen the rising house prices reach the steepest increase in almost 18 years. Places such as Sydney and Canberra have recorded the fastest quarterly increases in almost three decades. Melbourne has also seen a new record high with their house and unit prices rising significantly.

It is said that median house prices are expected to far surpass $1m in the next quarter alone. It seems as if affordability is being pushed very far out of reach for many people looking to own a home. News.com.au reports that the major driving force in this boom has been first home buyers, in much the same way as they were during the global financial crisis.

Landlords contributing to rising house prices

Funnily enough, people often buy houses and don’t even live in them. This is something called ‘rent-vesting’ that has become more and more popular since 2000. Since this time, people have been wanting to buy houses to rent them out and become landlords. These days, one in 10 people are landlords which equals out to around two million Australians.

To get the properties, aside from buying them, they have had to outbid people. Most of the time, they outbid people who would have actually lived in the house. While doing this, they have subsequently been pushing up the prices. Rather than investing in companies or the stock market, they are buying rental properties more than ever before.

buying a house 2021

A continued rise

Apparently, the rising house prices won’t be ending anytime soon. With mortgage rates reaching new, extreme lows as well as wealthier Australians coming out of the crisis with their wealth intact, it could mean trouble. It makes a lot of sense to do what others are doing. However, it will push up prices resulting in even more hardship. This could create some very uncertain times.

The bottom line is that it is not attributed to a shortage in housing. Instead, it will be pushing home prices even farther out of reach. News.com.au says “Whether or not investor activity will rise sufficiently to make up for this inevitable loss of demand in the longer term remains a matter of debate. But in the short term with the growth in housing finance commitments currently heading ever higher, it’s likely that we will continue to see strong housing price growth in the months ahead”.

How you can find help with rising house prices?

A saving grace with rising house prices is the Australian Lending Centre offering home loans for anyone. Whether you are looking to upsize, downsize or invest, need a loc doc loan or you have bad credit. We have a wide range of home loans to suit most situations.

Australian Lending Centre can help to finance the purchase of a house in many ways. With standard Home Loans, First Home Buyer Loans and Investment Property Loans. If you can’t afford to buy a house due to the rise in house prices, then you could renovate your existing home instead. Contact us today for all your home loan needs and more.

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Mortgage Investment Property Loans

Can I Get A Second Mortgage For Down Payment?

Having already entered the property market you are well aware just how addictive it can get. Whether you are living in the place you own or renting it out as an investment property, it’s no secret that property is one of the best investments you can make. Of course, they are expensive investments and require a large down payment to secure. This may leave you wondering: can I get a second mortgage for a down payment?

What is a Down Payment?

Let’s take a look at exactly what a down payment is when purchasing a property. It is essentially a payment that is made in cash when you purchase the place, often representing a percentage of the entire price. As a home buyer, it is common to pay anywhere between 5% and 25% of the total value as a down payment, while the bank or financial institution you have chosen for your loan pays the remainder.

Once you have made this transaction, you then continue to pay off the mortgage with your lender. As you can see, it is a sizeable chunk of money that you pay upfront, before you then go on to pay off the loan. This is why considering a second mortgage for a down payment is an attractive offer. Having already forked out one down payment before, it can be even harder to do so a second time, especially while also paying off your current loan.

second mortgage for down payment

How Does a Mortgage Work?

Buying a house is a big commitment, and if you have already been down this path, then you will understand the financial strain that can come from buying a second. The bigger the down payment you can make at the beginning, means the less you have to pay off in the long run, as you won’t be charged interest from your lender on that amount.

A mortgage is a type of loan. The property you purchase is used as collateral against this loan, so if you default on payments the bank can take possession of your home to pay back the loan. The principal is the amount you borrow from the lender to buy the property in the first place. The interest is the cost added on top for borrowing the money. You can choose from a fixed interest, where the rate stays the same, or a variable interest, which can change over the life of your loan.

Having a mortgage is a huge commitment, so let’s take a look at whether you can take out a second mortgage for a down payment.

second mortgage

Can I get a Second Mortgage for Down Payment?

You can, in fact, use the equity on your first property to buy a second one. What exactly does this mean?

Let’s take a look at an example. You bought your first home for $300,000 and took out a loan of $250,000. Five years later, your home is now worth $500,000 and you owe $250,000. This means you have $250,000 equity in your first loan and can withdraw up to $150,000 in home loan equity. You can generally release from 80% to 90% of the value of your property in equity. You then refinance to access this money, which can be used for your deposit and for pay off some of the property.

Another option is to cash out this amount to use it directly as a deposit for your second property. Some lenders may have restrictions on how much you can cash out, so be sure to check first. This can range from $50,000 to the full amount, depending on your lender.

So how do you qualify? Of course, not everyone will be entitled to take out a second mortgage, so do your research before going ahead. Here are some of the conditions you must meet:

  • You must owe less than 80% of the property value to your home.
  • Your repayment history must be exemplary.
  • Be able to provide at least two recent payslips.
  • Have a good credit history.
down payment

Is a Second Mortgage for a Down Payment the Right Choice?

Just because you qualify, doesn’t make it the right choice for you. There are plenty of other things to take into consideration:

  • Can you afford two mortgages?
  • Have you factored in the other costs that come with buying a house, such as building inspection, etc?
  • Have you shopped around for the best interest rate?

Where to go for Support & Advice?

If you are certain you are ready to take out a second mortgage for a down payment, then it always helps to get some professional advice before committing. The experts at Australian Lending Centre can talk you through all your options. Make the best decision for your circumstances and avoid facing issues down the track with our help.

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Mortgage Business Loans Renovation Loans

How to Get an Affordable Second Mortgage

By getting an affordable second mortgage on your property, you are not only increasing your borrowing power — but you can use the extra money for your other needs. If you planning to increase your overall borrowings, but you have an existing mortgage, the easiest approach is to refinance it for a higher amount. One of the most important considerations in getting a second mortgage is reducing your balances by up to 50 per cent! You may ask, “How is it even possible?”

The truth is that a lot of people incur interests due to unpaid mortgages which build up over the years. In doing so, they are not only reducing their home equity, but they are also putting their homes at risk of foreclosure. So, if you can successfully negotiate your balance reductions and avoid foreclosure of your property at the same time, grab that chance. It does not only help you save money and at the same time avoid legal actions that may damage your credit status.

Here are tips to help you get the most practical and most affordable second mortgage possible:

Research is key to an affordable second mortgage

You can search for public forums and blogs that talk about the best second mortgage options available for someone with the same situation as yours. It will help you filter debt settlement companies that are willing to work on your case for a fee. By doing your research, you will understand the importance of negotiating for balance reduction, the expenses you have to pay in the process and the available options for you in your area. Just make sure that you know how to filter objective from subjective advice. Otherwise, you may immediately take up an expensive service when there are less expensive ways of solving your mortgage problems.

Weigh the Pros and Cons of Second Mortgages

In reality, it only makes sense to get a second mortgage when you don’t have ready access to funds but want to pay for your mortgages and other high-interest debts. It is also a practical and low-cost alternative for those who want to start a business. Some people who are in serious debt also use second mortgages to consolidate debts. Before applying for an additional mortgage, ask yourself if it is possible to meet your financial need without getting another debt. Or, if the proceeds of the extra money you will get are worth the interests you have to pay for a long period of time.

Choose the right lender

Some mortgage applications take a lot of time. If you don’t want a very time-consuming process, like those in banks which discourage low-income applicants with low credit scores to apply by implementing very difficult qualifying criteria, go for alternative lenders like Australian Lending Centre. The company implements fast approval process because it often handles second mortgage applications and there are no errors and delays involved because the staffs are skilled and experienced in this type of loan. The fees are affordable and manageable as well.

After that, use the proceeds of your second mortgage top pay for your urgent needs. That means you need to learn to prioritise your needs-and spend only on those that would improve your financial situation. For example, if you still have a car which is up and running and you have a huge debt to pay, perhaps it would be wiser to pay off those debts before you buy your dream car.

Thoughts for Consideration on an affordable second mortgage

It is not easy to bring yourself to do all those things mentioned above. Almost everyone knows how difficult it is to get an affordable second mortgage especially if you have a poor credit rating. On top of it all, you may have developed financial habits that diminish your income and your financial strength. But, over time, with practice, you can break habits that you may have been practising for many years.

The pull to take advantage of a second mortgage that offers ‘high equity’ at the expense of high interest may lurk everywhere you turn. There are many loan sharks offering ‘quick approval’ second mortgage online. The ads may show people enjoying a dream vacation, staying in a lavish home or probably spending for a grand wedding despite their bad credit. But the truth is that, when you have a bad credit—you should be careful with whatever money that comes your way.

Remember that getting into debt is a financial decision with a huge emotional impact. There could be many personal and emotional hurdles that can get in the way of making the best financial decision. That’s why it is important to educate yourself about mortgages and how you can use them wisely to avoid self-blame and guilt when things don’t go as planned.

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Mortgage Financial Fitness Financial Planning

Second Mortgage: Can You Handle the Effects of Inflation Before Retirement?

How do you protect your finances from inflation especially if you have a second mortgage?

While it is impossible to avoid inflation, you don’t have to suffer the huge impact of the decline in the purchasing power of your money, although you have a second mortgage. If you are careful with your spending decisions today, you may not even have to worry so much about your finances tomorrow. But, as your income increases, bear in mind that your expenses may soar as well. Even if it doesn’t, the prices for goods and services can increase in time.

Shield your finances from the detrimental impact of inflation:

Build Your Home Equity

If you want to get approved for a higher amount of loan in the future, make sure that you build your equity today. You can apply for a second mortgage on top of a first mortgage to save on interests and fees or to make improvements that will increase its future value. While equity usually pertains to the actual value of your home that you own or the amount you paid for. It can also refer to its future value.

It may take a couple of hundred dollars or thousands of dollars to increase the value of your home. But, if you follow the tips below, you can increase your home’s value with just a few extra bucks a month:

  1. Apply for a short-term low-interest loan (payable on installment basis) to pay for necessary repairs. Look into plumbing and heating problems, roof leaks, and the possibility of installing lightbulbs with slightly higher wattage to add to the value of your home on a budget. Clean the yard (if you have one), mend the fences, and paint your walls with fresh colors to make online casino it more appealing
  2. Make your house appealing to the realtor by doing a basic cleaning, eliminating unnecessary items and junks to make it more spacious and eliminating house smells
  3. Install energy saving devices and make environment friendly improvements that future buyers may look for in a home

The comparable selling price in your neighborhood can limit the value of your property. While you may not get a higher value for a home in a neighborhood with huge incidents of foreclosures, making small improvements can help you increase its value before you apply for a second mortgage, or before you retire.

Invest your money wisely

Choose the right investments. It can be in the form of UITF, stocks, bonds, or savings accounts with good interest rates. Some people invest in real estate in industrial areas, or in bustling cities for better returns in the future. Put in money into your retirement savings accounts, pay off loans you took from it and update your payments regularly. If you don’t have a good health plan, perhaps it is time to get one—as you are nearing your retirement age.

Evaluate your budget

Have you been spending excessively in the past year? Or was the expense due to existing debts? Perhaps it is time to earmark certain areas in your budget. Collect the receipts, bills and every proof of purchase you can get, create a spreadsheet of possible adjustments you can make and work towards minimum deviations to make your budget work.

Make lifestyle changes

What is the kind of lifestyle that you really want? As you inch towards your retirement age, it is important to decide how you like to spend it. If you want a life of luxuries, make sure that you have enough money to cover it. Otherwise, it is advisable to minimise luxury spending and to adopt a new lifestyle that matches your current and future income.

Augment your income to avoid the effects of inflation

It is never too late to seek for new opportunities to generate income. Explore fresh opportunities using your profession or business. Anyone can begin a company with a business loan. A company PR manager can start a consulting business on external communications, while a company accountant can also launch his own book keeping service. In the same way entrepreneurs who feel that they can no longer manage their business right after retirement, can take on private consulting jobs for startups.

Anything that would add value to your financial portfolio is worth the effort-as long as it will not put you into the same level of stress when you were still in active service. Interest rates on second mortgage, personal loans, consumer loans and basic commodities keep getting pricier over the years. What our grandparents spent for a carton of milk in the past may just be enough to buy a candy today. Change in price happens because of inflation.

The value of money reduces in time and allows us only to buy a smaller percentage of the commodity or item than its previous value. For example, if the inflation stands at 5% per annum, a $20 burger could get pricier by a dollar the next year. So, if you have a second mortgage, it is advisable to build your equity over time. And, if you don’t have one, you may look into the benefits of getting a second mortgage to have extra money not only to pay your existing debts but to pursue lucrative endeavours that would increase your income.

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Mortgage Financial Fitness Financial Planning Home Loans

Will My Car Loan Affect My Mortgage Application?

A car loan can help you a lot if you plan to get your next car faster. However, a car loan can affect your mortgage application or other types of significant loans. If you are planning to buy an expensive car, this means that you will require a large loan. That car loan can impair your future borrowing power. But this doesn’t mean that you need to choose just one of these two.

Let’s see how a car loan can influence mortgage applications and how we can deal with such a situation.

First Things First

When you apply for a home loan, you will need to provide information regarding your financial status. This means that you will have to give documents regarding your monthly income, assets you own and other ongoing payments. This is how a lender will determine whether you can pay back the loan or not. Every lender wants to avoid doing business with people who might not be able to keep their word because of their financial problems. They want profit, not excuses.

If it were a personal loan, your mortgage application would be fine. But since we are talking about an expensive car loan, your mortgage application might get rejected due to your other massive loan. Either that or come with a lot of restrictions.

mortgage-application

Will My Car Loan Affect My Mortgage Application?

A car loan will have a high impact on your finances. Given all the taxes you need to pay, a car loan can take most of your monthly income. Still, aiming for a cheaper car might be of some help. Since cars tend to lose their value quite quickly, getting a very expensive one may not be a good idea, especially if you intend to apply for a mortgage.

Mortgage applications will act the same so that you will be left with little to no money. This is why a lender will probably have to refuse your mortgage application.

A lender wants to know that you will pay your mortgage and you won’t default on it. He will analyse your assets and other methods of income. If he sees that you have the financial power to afford a car loan and a mortgage at the same time, he might give you the green light. If not, it might be better for you if you only had one.

Defaulting on a mortgage is not a good sign for your lender and your finances. Car loans and home loans can quickly turn into uncontrollable debts, and you might end up losing everything. So don’t think of the lender as the bad guy, but be objective and calculate what you can and can’t afford, because in the end, if you are dishonest, you will suffer the most. Because banks and lenders make sure they never lose.

eligible-for-loan

Can I Still Be Eligible for a Mortgage Application?

Yes, you can. Your car loan will affect how much you can borrow, but if you don’t want an expensive house, that a limited amount of money can be just enough. If you can’t get the sum you need, you can search for an affordable home. When it comes to loans and money, flexibility is a must.

If you want to increase your chances of getting your mortgage application approved, then it’s time to clean a little bit of your credit file. Pay your debts and try to repair your bad credit. Also, consider debt consolidation as a possibility. Lenders will check your credit to find out who they are dealing with and also what other assets you own, just in case they might have to make up for that loan with something else rather than your money.

Having a savings account is a great idea. It makes you more trustworthy and responsible in the eyes of your lender. Let’s not forget that having some savings might help you quite a lot to reduce the amount you would apply for.

Also, try to talk to your lender. The more information he gets regarding your situation and income, the bigger the chance of getting your request approved. Don’t forget to tell him your exact plans.

suitable-car-loan

Final Thoughts

So, the short answer is that a car loan can influence mortgage applications and under certain circumstances, it can get your requests denied. But do not let yourself discouraged. Evaluate your possibilities, cut down on the unnecessary expenses and, if you can, try to pay ongoing debts before applying for a mortgage.

You can talk about these details with Australian Lending Centre. Our friendly consultants will tell you about your chances of receiving a loan and, if you fit our criteria, you may even get a good mortgage option. Advice never harmed anyone so you should not miss the chance of clarifying your options face to face with an expert.

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Mortgage

Second Mortgage Loans For People With Bad Credit

Not sure whether second mortgage loans are a good idea with bad credit? Here are a few things to keep in mind before conditioning your mind into making new monthly mortgage payments again.

Some people don’t like second mortgages…

Some people, especially retirees don’t like the idea of carrying a second mortgage throughout retirement, despite the thrill of reinvesting the money into something lucrative. New homeowners with enough home equity to use for good business ventures also don’t think that the second mortgage is a brilliant financial strategy. But, just like any other investment-carrying, a second mortgage can be a good idea in certain situations, but there can be drawbacks too.

Here are two factors you must consider before hopping into second mortgage loans for people with bad credit.

Home equity

Do you have more than enough equity to take the plunge? Don’t wait for another housing bubble to burst. Use your equity as a form of leverage before the home values plummet sending many mortgages down the sink. Know where your equity stands, before you sign up for a new loan.

Since second mortgages allow you to borrow up to 80% of your home’s value-it is not enough to know how much you can borrow, but how much you can repay. While the second mortgage has lower interest rates than other types of loan, remember that you are still securing the loan with your home. While it reduces the risk for your lender, it increases the risk on your part-because inability to pay it could mean losing your own home.

Diversification

A lot of people suffered during housing bubbles because they got fooled by attractive real estate returns in the past years. But, those who opted to get a second mortgage to diversify their portfolio were able to do better and can be expected to do so in the future.

You are shifting your assets from your home by getting a second mortgage and investing in ETF’s or mutual funds or in a business venture, thereby diversifying your portfolio to enhance your net worth. Aside from the fact that diversified portfolio outperforms residential real estate returns, getting a second mortgage is also tax-deductible. So, if your home makes up a huge portion of your net worth, it is advisable to get a second mortgage and use it as a tool for diversification. But, despite the potential advantages of this strategy, it can also have some side effects.

Some Final Considerations Before Taking Out Second Mortgage Loans With Bad Credit

If you want to take out a mortgage as a form of leverage, you should know how to handle your other investments wisely. Remember that by getting a second mortgage to diversify your assets, you’re also exposing your home and your additional investments to risk. Increased risk exposure requires increased wealth management strategy as well.

In short, if you are scared of downward fluctuations, make sure that you have personal skills to handle all your new investments before you get a second mortgage for diversification purposes.

Learn more about second mortgage loans for people with bad credit and the financing options available for you by talking to Australian Lending Centre’s consultants today!

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Mortgage

The Reality of Mortgage Repayments

In spite of the loan solution you carefully select, you should comprehend the way in which a loan works, and what it implies. Understanding the reality of mortgage repayments is the first step to making the right decision to fit your financial status.

Understanding Interest

Recently, Australians have benefited from low and attractive interest rates. So, how does this influence your mortgage repayments? Mortgage providers grow or diminish their rates, to mirror the movement exercised by the set cash interest rate. At the moment, interest rates are estimated at around 4.5 per cent, depending on the lender.

Although selecting fixed mortgage repayments over variable ones might seem the right choice, as it protects you from fluctuations, some other aspects should be considered. If you’re locked into a variable home loan, when the cash rate lowers, your interest will also decrease. Even though this is an unmatched advantage, Aussies should know that low rates don’t plan on staying this way forever.

To grasp the way in which this phenomenon influences your mortgage repayments, hear us out. A standard variable rate for a 25-year old loan of $200,000 would have a $1112 monthly payment, with 4.5 per cent interest rate. If this would change with as little as one per cent, it will either rise to $1228 or diminish to $1001.

Also, bear in mind that, over the life span of a loan, fluctuations may reach $100 per month. What we’re trying to say is that you should embrace a repayment plan with the right contingency measures, in the case in which the interest rate spikes.

When the Loan Matures

You should also note that the market conditions are due to change. That is inevitable. In this respect, you should take advantage of whichever opportunity you have to refresh your financial approach. An option might be to discuss with your financial advisor. But, before doing that, there are some solutions for adjusting your mortgage repayments:

  • Refinancing: When the interest rates are low, you can always consider refinancing. That may be a more convenient option. Even though there are exit and entry costs that should be factored in, as a general rule, you’ll recoup those expenses over the life of the loan.
  • Pay ahead: If the interest rates are low and your budget enables you, you should consider getting ahead on your mortgage repayments. If you manage to make a considerable repayment during this time, not only that you will decrease your overall loan balance, but you’ll save a lot on interest rate payments.
  • Fix your loan: If your credit conditions are permissive enough, we advise you to lock in the new low rate.

To conclude, comprehending the market conditions does pay off. When you sign a loan agreement, you should know what it implies, how the market is due to change and how it can affect you.

In spite of your current status, don’t hesitate to refresh your mindset, in the case in which the market alters in your favour. Why shouldn’t you take advantage of it? Nonetheless, bear in mind that you should discuss with your financial advisor before taking the leap.

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Mortgage

Is a Second Mortgage a Wise Investment for People With Bad Credit?

Not sure whether to get a second mortgage is a wise investment for people with bad credit or not?

Here are a few things to keep in mind before conditioning your mind into making new monthly mortgage payment again.

Some people don’t think second mortgages a wise investment

Some people, especially retirees don’t like the idea of carrying a second mortgage throughout retirement, despite the thrill of reinvesting the money into something lucrative. New homeowners with enough home equity to use for good business ventures also don’t think that the second mortgage is a brilliant financial strategy? But, just like any other investment-carrying, a second mortgage can be a good idea in certain situations, but there can be drawbacks too

Here are two factors you must consider before hopping into second mortgage loans for people with bad credit.

Home equity is a second mortgage

Do you have more than enough equity to take the plunge? Don’t wait for another housing bubble to burst. Use your equity as a form of leverage before the home values plummet sending many mortgages down the sink. Know where your equity stands, before you sign up for a new loan.

Since second mortgages allow you to borrow up to 80% of your home’s value-it is not enough to know how much you can borrow, but how much you can repay. While the second mortgage has lower interest rates than other types of loan, remember that you are still securing the loan with your home. While it reduces the risk for your lender, it increases the risk on your part-because inability to pay it could mean losing your own home.

Diversification

A lot of people suffered during housing bubbles because they got fooled by attractive real estate returns in the past years. But, those who opted to get a second mortgage to diversify their portfolio were able to do better and can be expected to do so in the future.

You are shifting your assets from your home by getting a second mortgage and investing in ETF’s or mutual funds or in a business venture, thereby diversifying your portfolio to enhance your net worth.  Aside from the fact that diversified portfolio outperforms residential real estate returns, getting a second mortgage is also tax-deductible. So, if your home makes up a huge portion of your net worth, it is advisable to get a second mortgage and use it as a tool for diversification. But, despite the potential advantages of this strategy, it can also have some side effects.

If you want to take out a mortgage as a form of leverage, you should know how to handle your other investments wisely.  Remember that by getting a second mortgage to diversify your assets, you also expose your home and your additional investments to risk. Increased risk exposure requires increased wealth management strategy as well.

In short, if you are scared of downward fluctuations, make sure that you have personal skills to handle all your new investments before you get a second mortgage for diversification purposes.

Learn more about second mortgage loans for people with bad credit and the financing options available for you by talking to Australian Lending Centre’s credit consultant today!

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Mortgage

When Is It Best to Apply for a Mortgage Without Your Spouse?

Applying for a mortgage is a tough decision to make, especially when you have a spouse and/or kids. There are cases when in fact it’s best to apply for a mortgage without your spouse. We’ll tell you all there is to know about mortgages and what helps you get your application approved, or what could get it dismissed.

Although starting a marriage and looking for a home might be a dream come true for most of us, applying for a mortgage is a rational decision to make. This takes time and ultimately, it might be smarter to apply separately for it.

Let’s see when it’s the best time to apply for a mortgage without your spouse:

If One of You Has a Bad Credit Score

Applying for a mortgage with your spouse means that both of your credit scores will be put on display for the lender to check and compare. Unfortunately, even if one of you has an excellent score, the one with the bad credit can bring both of you down.

The bank will pay more attention to the negative score even if the other score could balance the negative one. As a general rule, it would be best for both spouses to have a medium rating, rather than big discrepancies.

In Case of Identity Theft

There’s nothing worse than applying for a mortgage and finding out that someone has used your name, destroyed your credit score, made many debts and, in addition, had a high credit usage.

To avoid this, check your credit score regularly. As rare as it is, identity theft is hard to prove and it also takes time to sort out the situation.

If your spouse has fallen victim to this sort of crime, but you’ve already found the perfect home, applying for a mortgage on your own is a wise decision.

In Case of Excessive Debt

A high credit card usage is considered to be over 20% of the current loan you’ve taken. Applying for a mortgage when your spouse’s debt has a high-income ratio might come with a denied mortgage application.

If the loan is still approved, consider that you’ll have to deal with higher interest rates, so it might be best to choose to apply on your own.

If There Is No Credit Score

Let’s say that maybe a person has saved money, and never had to take on a loan. From the bank’s point of view, that individual presents a risky application. By not knowing anything about his/her finances and not having any proof that the applicant is trustworthy, the bank will be sceptical in approving the loan.

Your spouse’s non-existent credit history or a short one will certainly be detrimental when applying for a mortgage.

Start by checking both of your credit scores and then talk to a mortgage specialist to give you some advice. He/she will surely tell you if it’s best to apply together, or on your own.