Lenders can't deny you a loan because you aren't married or because you are divorced. They can't reject your loan application because you are widowed.

But this doesn't mean that your relationship status can't hurt or help your chances to qualify for a mortgage.

If you're married, your spouse's credit score or debts could hurt your chance to qualify for a mortgage loan. If you're divorced, the payments you make each month for alimony could reduce the amount of mortgage money a lender will give you.

"We look at each customer based on factual data and credit score," said Ray Rodriguez, bank regional sales manager with Mt. Laurel, New Jersey-based TD Bank. "Whether they are married, not married, in a domestic partnership, engaged or single, that plays no role. We just want to make sure they can make their payments."

Here is how being married or divorced could either improve or worsen your chances to qualify for a mortgage.

Married

Married couples have flexibility when it's time to apply for a mortgage. If spouses apply for a loan together, they can use both of their incomes. Lenders might then be able to approve them for a larger loan.

Being married, though, can cause problems, too. Lenders rely heavily on credit scores when determining who qualifies for a mortgage and at what interest rate. You have three FICO credit scores, one each from the national credit bureaus Experian, Equifax and TransUnion. When you and your spouse apply for a mortgage together, your lender will only consider the lowest middle score between you and your spouse.

If you have FICO credit scores of 740, 750 and 760 but your spouse has scores of 620, 580 and 640, your lender will only consider your spouse's 620 score when determining whether you qualify and at what interest rate.

Because of this, you'll have to determine whether it makes sense for both you and your spouse to apply together for a mortgage. If your spouse's credit scores are too low, it might not. But if you don't jointly apply for a loan, your lender will not be able to use both of your incomes when determining the amount of money it will loan you.

Divorced

Lenders can't hold being divorced against you when you apply for a mortgage loan. But lenders will look at your income and debts when determining whether you can afford a mortgage. This means that your lender will look closely at the amount of money you are spending each month on child support or alimony.

These regular payments will factor into your debt-to-income ratio. Lenders prefer that your total monthly debts - including your new estimated mortgage payment - equal no more than 43 percent of your gross monthly income. If your alimony or child-care payments push you past this ratio, you might struggle to find lenders willing to approve you for a mortgage.

If, though, you are receiving regular alimony payments, you can use this as income to help you qualify for a mortgage. You must have been receiving these payments for at least six months and must be able to prove that the payments are scheduled to continue for at least the next three years.

"Your lender will want to see the divorce decree or the separation papers," Rodriguez said. "Sometimes people feel that is being intrusive. But it's not. We just want to see who is responsible for what financially. That is all we are looking for."

Single

Being single isn't a strike against you, as long as you have enough income to qualify for a loan. But unlike a married couple, when you're single you don't have the option to tap another borrower's income to help you qualify for a larger loan.

But single buyers do have an option. You can always rely on a co-signer - usually a relative - to help you meet the financial requirements.

In such an arrangement, your co-signer agrees to make your mortgage payments on your behalf if you can't do so. This eases the concerns of lenders worried that you'll struggle to make your payments.

Rodriguez says he often sees co-signing relationships between parents and single children: The parents agree to co-sign on a loan so that their single children can get into a home.

Be careful when working with a co-signer, though: If you miss your payments, your co-signer's credit will take a tumble. That's a good way to strain a relationship. And if you stop making your payments entirely? You can bet that whoever co-signed your loan won't be happy with you.

"There must be an understanding that both parties are responsible for the mortgage payment," Rodriguez said. "If the person paying the mortgage should run into financial difficulties - sudden debt, a job loss - and can't make that payment, the co-signer is responsible for making it. That could affect mom and dad."

Published on August 23, 2007