My fiancé is planning to apply for a mortgage soon but I am worried he will get denied or allowed to borrow less due to having no rental history ever. The reason for no rental history is that we have been together 16 years and I have been the one always paying a very low rent for a home owned by a family member and my fiancé has lived with me all of this time rent free. I will not be applying for the mortgage with my fiancé due to poor credit and lack of verifiable income.
My fiancé however has a 19 year perfect payment history on his credit report, a credit score of 749, several large loans in his history of 15-20k all paid off early, a stable job of 2 years with verifiable income and no employment gap for 8 years, and enough saved for at least a 10-15% down payment. I am worried that the mortgage will either be denied or we will get a debt to income ratio of less than 36% because they might think he will get mortgage payment shock due to never having paid rent before.
Even though my fiancé has never paid rent he has been saving 50-60% of his income every month for two years and this can be seen by looking at his bank account. So if he can save that much every month of his income than spending 36% on debt to income ratio is no problem but I'm worried the bank will think otherwise. With his Savings and debt payments (student loan only) he is actually using about 80% of his income. So going from that to 36% would be a huge drop compared to now. We need to be loaned at least 36% debt to income ratio to get the number of bedrooms we need for our children and we live in an expensive market so any less than 36% and we wouldn't be able to get anything at all because nothing sells that low here.
I know every lender is different but how likely will the lack of rental history matter or be asked for? Will we likely be loaned less because of this thing called "mortgage payment shock"? We only want a conventional loan so we can consider condos. Thank you for your opinion and advice.
