Does a Non-Working Spouse's Credit Affect a Home Loan?

Marriage doesn't require that both spouses apply for loans together, although with large purchases such as a home, they often want to do so. If one spouse has no job or negligible or bad credit, it often makes more sense for the other to apply for a home loan on his own. The option isn't without some pitfalls, however, and if spouses do elect to apply together, they may end up paying a price for that as well.

Credit Scores

If your spouse's credit is iffy in addition to her being unemployed, this will probably sabotage your chances for financing if you apply for a home loan together. No matter how good your own credit might be, and even if you're the primary breadwinner, mortgage lenders look to the lower of a couple's two individual credit scores when approving a loan. Therefore, if your spouse's credit score is only 560, this may prevent you from qualifying, even though your income will be paying the mortgage and your own score is 790. The same applies if your spouse has no credit score because all marital loans have historically been in your name. Lenders will look to her lack of credit history when determining financing.


Another scenario is that your spouse is unemployed but her credit score is stellar. Conversely, this probably wouldn't hurt your chances of qualifying for a joint loan, provided your own credit score is good as well. If you both have top-notch scores, the lender will go with the lowest, but there may not be much difference between the two. However, lenders base the amount of the loan in part on your debt-to-income ratio, the comparison between what you earn and what you owe. You might qualify for less of a mortgage if only one of you earns income than if both you and your spouse had earnings, particularly if you're paying other debt off as well.

Effect on Interest Rate

The difference between applying for a home loan in your sole name or applying jointly can have a dramatic effect on your interest rate if your spouse's credit is not good. Although her lack of income shouldn't affect the interest rate, a subpar credit score will. The lower her score is, the higher rate you'll pay. If she has no income anyway, you might save yourself a bundle over the long term by applying on your own and leaving her score out of the equation, assuming you have good credit.


If your spouse's lack of employment is temporary, it might be worth waiting a while to refinance or buy a new home. If she secures a new job and you both have good credit scores, you'll get a good interest rate and you should also qualify for a larger mortgage with more income. If your spouse historically hasn't worked because she's opted to stay home and care for your family, and if she has no credit history at all but really wants to be on the loan, you can take steps to create a history and score for her before you apply. Even if she's not working, she might still be able to qualify for a secured credit card which she can begin using and paying off regularly to establish a good credit track record. You can also take out joint cards or loans together – such as for an automobile -- and your payment history would appear on her credit report.

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About the Author

Beverly Bird has been writing professionally since 1983. She is the author of several novels including the bestselling "Comes the Rain" and "With Every Breath." Bird also has extensive experience as a paralegal, primarily in the areas of divorce and family law, bankruptcy and estate law. She covers many legal topics in her articles.

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