Home Refinancing for Unmarried Couples

Home refinancing is something that property owners can do in order to take advantage of a lower interest rate, which of course, in turn, lowers their monthly payment. If you and your partner are living together in a home, but are a same-sex couple, you probably won’t be surprised to learn refinancing is going to be somewhat of a challenge. That’s because, in the state of Florida, same-sex marriage, even if the legal relationship comes from another state, is not recognized.

What this means is–especially if you and your partner do not co-own your home–you’re going to be qualifying under a single name, with a single income. Simply put, your partner cannot be part of the refinance because his or her name isn’t on the deed and isn’t on the mortgage. However, this certainly isn’t to say you won’t be able to qualify to enjoy the advantages of a refinance.

Advantages of Home Refinancing

The benefits are quite large when you refinance your home. The biggest being a lower monthly payment; but, there are more. For instance, if you’ve recently been given a raise at work, then you can refinance and change the term to 15 years or 20 years. This will allow you to more quickly build equity. You can also change the program type, regardless if you’re earning more or the same amount of money.

“In a 2009 survey, the National Association of Realtors® found that 8% of homebuyers in the U.S. were unmarried couples. These couples often purchase homes with little thought of the future. If you plan to buy a home with a domestic partner, it’s best to make sure that you have an agreement that explains in detail what your rights and responsibilities are. Put the agreement in writing and have a lawyer review it.” —Realtor.com

A refinance can also be a way to pull a little cash out through earned equity, giving you the ability to make property improvements to increase the value of your home. It also will help your credit score and give you the ability to put a little more toward the principal, amortizing the note at a faster rate.

Refinancing Under One Name, One Income

When you’re ready to refinance, you’ll likely be doing so under one name and with one income. That means even though your partner earns money which you share, lenders will see you with a relatively high debt-to-income ratio. Here’s how you qualify for a refinance in that situation:

  • Get you documents in order. You’ll need recent bank statements, at least the last two years of tax returns, as well as recent credit card statements. In addition, any investment statements will be necessary.
  • Shop around before applying. Just like you do with any large purchase, you should compare and contrast lenders. Some will have better rates but higher fees or low fees, but rates that aren’t as attractive.
  • Prove you’re reducing your debt. If you have been paying down debt, be sure to provide documentation to demonstrate you’re committed to reducing your debt-to-income ratio.

Last but not least, choose a lender and be prepared to provide more financial documents, if requested.