The joint mortgage credit (better known as a spousal credit) is a financial product that can be contracted with the spouse or the couple (even if they live in free union) to acquire a house. At first glance, the characteristics of joint credit make it look like a very attractive financial alternative. However, it is necessary to do a detailed review to determine if this credit meets the needs and economic capacity of the couple.
Still haven’t decided if spousal credits are the best option for you? Learn about the main advantages and disadvantages of this type of financing:
Advantage Of Couple Mortgage
- Higher budget Adding the income of two people increases the budget, so that the couple can access a better house. This is not only beneficial for the comfort of the couple. Acquiring a property with better conditions ensures greater capital gain.
- Greater protection The processing of these credits usually includes life insurance that protects the couple. If an accident occurs and one of you dies, this policy would automatically cover the debt. Unlike individual loans in which only the borrower is insured, a spousal loan offers greater protection.
- Better conditions In general, conjugal loans represent a lower risk for banks unlike personal loans, which is why they tend to offer better conditions. Depending on the accumulated amount and the couple’s credit history, a better interest rate, a lower monthly payment or more comfortable terms can be obtained.
Disadvantages Of Couple Mortgage
- Legal problems Having a shared responsibility can be a big problem when the couple decides to separate. If an agreement is not reached, the property can go into litigation, which means time and money.
- Bad credit history Perhaps between the two of you you can have a greater down payment, but if one of you has a bad credit history, you run the risk of being rejected. Before starting the process, check your financial statements in the credit bureau.
- Greater commitment Installment loans are commitments that last for years. When joint financing is requested, the obligation is higher because it is calculated taking into account the income of both people. If one of them were left without a job or simply decided to stop giving their contribution, the responsibility would fall on the other person. This is very important, since it is not the same to answer for an individual debt as for a shared one.