Many LGBT couples have gotten married in the past weeks following the Supreme Court’s decision in Obergefell v. Hodges. If you’re one of them, you may want to immediately do all of those things that you never expected you’d be able to do: get on your now-spouse’s insurance, legally adopt their biological children without a fight, and buy a house together as equals. But when it comes to buying real estate, should you immediately jump into this investment? Gay and lesbian realtors recommend you look at your credit before you do.
LGBT couples have purchased homes together as two individuals for years. However, like all single people who purchased property with at least one other single person, they were considered tenants in common, not joint tenants. This meant that if one person died, the other did not automatically receive full ownership of the property. This lead to some legal battles and, in the end, meant that LGBT couples needed to do the additional paperwork to make certain there was no issue in who owned the home. That’s no longer an issue since married couples hold property as joint tenants, so in this regard, it’s much easier to buy a house now.
Your Credit as a Couple
However, some LGBT couples are jumping into the mortgage process without stopping to think about their credit as a couple. Two individuals who applied for a mortgage were evaluated as two separate people. If both people have good credit, it’s fairly easy to get approved for a loan. When going into this process, both individuals usually take a good look at their credit beforehand, and it’s somewhat easy to get a good idea of how the application will be taken based on the lower person’s credit.
However, married couples are not seen as two separate people; instead, they’re viewed as one applicant. But the lender will still pull both people’s credit reports and evaluate them. This means that the two are combined using some formula that’s more difficult to guess. Will one spouse’s large amount of student loans counterbalance the other’s spotless credit card record? Will a missed payment on one person’s credit be too much of a red flag? It’s more difficult to determine the outcome of the loan.
Assess Your Credit First
If one of you has some credit issues or flags on your credit report, it may be best to wait on purchasing a home for a few years in order to work on dealing with those issues. This is also a good time to assess your finances. Can you afford a down payment, closing costs, and a mortgage? It’s important to ask these questions before jumping into home ownership.