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When most couples buy homes, they apply for the mortgage loan together. The reason for this is that, if both of them have good credit and are both working, they can get larger loans together than they could get on their own. However, if one spouse wants to take out the loan on his or her own, there are ways that it can still be beneficial to the non-borrower if the couple splits up.
The thing to remember is that both spouses can be named on the note, even if one of them took out the loan individually. This is most beneficial for someone who is not working in Arizona.
If you have no job—perhaps you stay at home and raise the children, which is a full-time job in its own right, but which doesn’t actively provide an income—then you may not use any lines of credit in your own name to make purchases. Your spouse could buy everything and take out loans for things like cars and business opportunities. If you don’t even have a credit card in your own name, your credit history is going to be pretty thin. This can make it hard to buy things after a divorce.
However, if you and your spouse are both named on the note, those payments that are made every month still help you with your credit score. If you then do split up, you’re still going to have a credit history, even though the money wasn’t yours and the mortgage wasn’t in your name.
While you don’t have to make every decision in your marriage based on the possibility of divorce, it is a good idea to keep these things in mind.
Source: Wall Street Journal, “A Lone Spouse on a Home Loan,” Anya Martin, Jan. 06, 2016
