My future son-in-law is trying to refinance his home mortgage. The man handling the refinance suggested that he might get a lower interest rate if he included my daughter's income and assets. They are unmarried, living together in Minnesota and expecting their first child in December. There are two parts to this question: Part One - Is this true about the possible lower interest rate and a good idea? and Part Two - Would they have to file taxes together from that point on? I would appreciate any advice and comments.
2007-07-10 14:46:58 · 3 answers · asked by mixerop 1 in Business & Finance ➔ Taxes ➔ United States
Forget about Part Two of my question - I already know the answer to that, I don't know where my mind was. Appreciate answers/advice on part one. Thanks
2007-07-10 15:57:32 · update #1
It is likely that your daughter has a better credit score than your future son-in-law and that would cause the bank to offer better terms on the rate.
It is always a good idea to get the best fixed rate possible. If he isn't able to qualify for the best available fixed rate (I would not, under any circumstances, take out any form of variable rate loan at this point in time, no matter what the loan officer is promising) on his own then it is highly likely that the mortgage that he is looking to take out is more than they should be borrowing. If a payment is unaffordable ("affordable" is usually defined as being no more than 30% of your monthly gross income; depends who you talk to) using the best 30 year fixed rate that he qualifies for, then the loan is too large and they need to look at a smaller house. The single biggest financial mistake young couples make these days is buying too much house, under the assumption that they're income will grow into the payment or that they'll be able to refi to a fixed rate loan at a later date when they can afford the payment better.
No, they would not be able to file taxes together unless they were married. If they were both listed on the loan, then either one of them would be able to claim the mortgage interest as a deduction on their federal return, but not both of them.
2007-07-10 15:14:14 · answer #1 · answered by Ryan M 2 · 1⤊ 0⤋
If they are purchasing the house together, then of course the additional income from your daughter would enhance the mortgage application. They do not have to be married to buy a house together. They would be tenants in common.
2007-07-11 00:44:11 · answer #2 · answered by ninasgramma 7 · 0⤊ 0⤋
They might get a lower interest rate, since they'd have more income to show.
And unless they are married, the CAN'T file taxes together - only a married couple is allowed to file a joint return.
2007-07-10 22:22:51 · answer #3 · answered by Judy 7 · 2⤊ 0⤋