No. of Recommendations: 1

You wrote, My wife and I just sent off for our credit reports for the first time (we have only been married a year). Mine is not too bad, but my wife's has many late payments and some collection actions on it. We plan on shopping for a mortgage within the next 18 months. Does anyone know whose credit the lenders look at when applying for a mortgate? Do they look at both?

If you apply jointly, they'll research both of you. If you apply alone, they'll depend solely on your income and your credit.

I had to drop my XSO on my last refinance (in '99) because she refused to deal honestly with me and her creditors. (She has her own income.) Fortunately I qualified for the mortgage without her. If I'd included her, they wouldn't have given me a reasonable rate.

If you can afford it, leave your wife off both the loan and the house's title. That will make things much simpler if you ever go to divorce her as the house won't need to be re-titled and you won't need to remove her from the loan. On the other hand, it will complicate things for her if you die as the house will become part of your estate and will go through probate. Depending on the state you live in, your Last Will and Testament, and whether or not your estate is worth enough to pay off the loan, the probate court may have no choice but to sell the house to satisfy the loan -- though selling it to your wife may be an option, if she can obtain financing. (The court will be forced to sell because the mortgage lender is under no obligation to let someone else assume your lein.)

- Joel
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