Very basic question but can't find the right answer by searching on my own. I currently am the only party listed on our Penny Mac mortgage, and my spouse is listed with me on the deed. We are finally in a position to refinance, dump our PMI, and get a better interest rate. We know that our interest rate and PMI are atrocious 
When we got the first mortgage, I income qualified on my own and spouse was a small business owner, so we didn't want the hassle of trying to secure mortgage with small biz requirements, therefore spouse not involved.
Are there advantages to doing just the refi with my info / qualifications? We would like to add my spouse to the mortgage but I am not sure that I understand what that would mean for the mortgage process and the pros / cons. In general we want to add him to the mortgage to distribute our debt load across both of us. All of the family debt was heavily skewed to me in the years we were building up the business. Our motivations are to lower interest rate, get rid of PMI, avoid substantial closing costs, and we are not necessarily targeting any kind of cahs out refi or anything like that. We plan on keeping this house for another decade or more, no intentions of selling in near future.
General data: We both have credit scores in the low 700's. Loan originated in July 2018. $427,500 now at $404,500. PMI $470 per month, Interest rate 5%. We have added about $100k in improvements and we are in one of the hottest housing markets in the US. Comparable homes in the area going for $700k - $800k. He has a verifed income of $100k+ so we would not have to jump through the small biz owner hoops like we would have last time. Thanks.
The closing costs are a thing regardless but if you can save non-trivial rate and dump PMI seems like a no-brainer, this all assumes the appraisal comes back with the value you expect.
If both of you are applying for the mortgage, both incomes (and all that entails) and both credit scores. Generally on this forum we see one person only doing the mortgage in the case where their income qualifies and their score happens to be substantially better than the spouse.
Realistically if both of you are credit qualified and roughly equivalent, I don't see many valid reasons not to go and put both on the mortgage app other than the additional potential paperwork frankly... and most of that paperwork is pretty simple these days. Something to be said for keeping other loan and credit types separate when talking credit defense (like you've already been doing basically, with putting debt on one person out of two), but you generally don't give up the house even in a BK as long as you keep making payments to it.
My opinion anyway.
@tdm2580 wrote:Very basic question but can't find the right answer by searching on my own. I currently am the only party listed on our Penny Mac mortgage, and my spouse is listed with me on the deed. We are finally in a position to refinance, dump our PMI, and get a better interest rate. We know that our interest rate and PMI are atrocious
Are there advantages to doing just the refi with my info / qualifications? We would like to add my spouse to the mortgage but I am not sure that I understand what that would mean for the mortgage process and the pros / cons. In general we want to add him to the mortgage to distribute our debt load across both of us. All of the family debt was heavily skewed to me in the years we were building up the business. Our motivations are to lower interest rate, get rid of PMI, avoid substantial closing costs, and we are not necessarily targeting any kind of cahs out refi or anything like that. We plan on keeping this house for another decade or more, no intentions of selling in near future.
General data: We both have credit scores in the low 700's. Loan originated in July 2018. $427,500 now at $404,500. PMI $470 per month, Interest rate 5%. We have added about $100k in improvements and we are in one of the hottest housing markets in the US. Comparable homes in the area going for $700k - $800k. He has a verifed income of $100k+ so we would not have to jump through the small biz owner hoops like we would have last time. Thanks.
I know a lot of couples choose to keep their mortgage under just one party (if possible) so they have a back up option if they ever lose the house through foreclosure.
There are COVID overlays that could make it more difficult now for your spouse then it would have been in 2018. For example:
If his income went down from 2020 to 2021, he may not qualify.
In any case, you definitely need to refinance
@VALoanMaster wrote:
@tdm2580 wrote:Very basic question but can't find the right answer by searching on my own. I currently am the only party listed on our Penny Mac mortgage, and my spouse is listed with me on the deed. We are finally in a position to refinance, dump our PMI, and get a better interest rate. We know that our interest rate and PMI are atrocious
Are there advantages to doing just the refi with my info / qualifications? We would like to add my spouse to the mortgage but I am not sure that I understand what that would mean for the mortgage process and the pros / cons. In general we want to add him to the mortgage to distribute our debt load across both of us. All of the family debt was heavily skewed to me in the years we were building up the business. Our motivations are to lower interest rate, get rid of PMI, avoid substantial closing costs, and we are not necessarily targeting any kind of cahs out refi or anything like that. We plan on keeping this house for another decade or more, no intentions of selling in near future.
General data: We both have credit scores in the low 700's. Loan originated in July 2018. $427,500 now at $404,500. PMI $470 per month, Interest rate 5%. We have added about $100k in improvements and we are in one of the hottest housing markets in the US. Comparable homes in the area going for $700k - $800k. He has a verifed income of $100k+ so we would not have to jump through the small biz owner hoops like we would have last time. Thanks.
I know a lot of couples choose to keep their mortgage under just one party (if possible) so they have a back up option if they ever lose the house through foreclosure.
There are COVID overlays that could make it more difficult now for your spouse then it would have been in 2018. For example:
If his income went down from 2020 to 2021, he may not qualify.
In any case, you definitely need to refinance
Is the risk of foreclosure that much anymore or was it simply a holdover of the bonkers time leading up to the mortgage crisis and people are still gunshy?
I guess someone or couple can completely lose their income and therefore their ability to repay but over the last decade we've existed in a strenghtening housing market... I suppose that might not always be the case to be fair and it's no different I suppose than what I posted about setting up for a strategic default on one person's credit and not both out of a couple.
