The short answer is: Yes! There are many reasons why someone would purchase a house without their spouse. Sometimes, you tie the knot and then realize your partner has terrible credit. Other times, you would prefer to keep your finances separate. You can even do it to save one of your Land Transfer Tax credits for the next purchase.
my partner has terrible credit, can I apply for a mortgage without them?
Credit drastically affects your mortgage qualifications. The difference between a couple with excellent credit verse a couple with good credit is $10,000’s in interest savings, and a much higher maximum purchase price. Sometimes, it’s just better to just get qualified and purchase a home on one spouse’s income and credit.
To really do this properly, don’t cosign or get a second card on a credit account that has tardy payments. However, a joined bank account is acceptable, because you technically have access to all the funds in the account.
My partner is self-employed, or not employed
Sometimes, when one spouse is out of work, or self-employed, they won’t have the prerequisite income to qualify for a mortgage. Self-employed individuals often claim a significant portion of their operating costs, which lowers their taxable income. Ultimately, that affects their mortgage qualifications. If you’re self-employed, there are alternative mortgage options available. One solution is a net-worth mortgage. It’s a mortgage that looks at your total net worth and then loans you money based on your collateral.
My partner and I would prefer to keep our finances separate
Keeping finances separate during the beginning of a marriage is becoming quite common. However, you need to speak to a real estate lawyer prior to closing on your home. Even if the home is in one spouse’s name, after being occupied by both partners the home becomes a matrimonial home. If you want to keep your finances and home separate, you need to have the requisite paperwork completed with a lawyer.
Keeping one partner on the mortgage, and title can save your tax credits
If two first-time buyers purchase a home together and go on title together, both their Land Transfer Tax credits are consumed. Both their RRSP withdrawal chances are also used. So, some couples see a benefit to buying their first home in one partner’s name, to save a tax credit for their next purchase. It would require that both partners have a strong income and credit history, and both are willing to live below their means.
If you’re looking to buy a home without your partner, the main consideration is affordability. If you have the income to qualify for the mortgage, or have cash on hand, then it’s very similar to a traditional sale. For more help feel free to reach out to our team.
