Mortgage Terms Hinge
On Your Credit History

Question: My fiancé and I are in the process of paying off credit-card debt that she had before we met. I have never been in debt and have a solid credit history. We plan to be debt-free before we apply for a mortgage. Will lenders care more about the negative credit history of my fiancé than our proven ability to reduce debt as a couple?

-- Tim, Schaumburg, Ill.

Tim: The problem is that creditors have long memories. In addition to their concerns with present credit status, they also examine many years of credit history. Your fiancé's past could adversely affect your combined chances of getting a good mortgage. (Today, almost anyone can get a mortgage, but poor credit forces lenders to require a higher interest rate and larger down payment.)

Consider purchasing the house on your own before marriage. This would allow the title and mortgage to be taken in one name only -- the one with good credit. One problem with this approach is that you may need two incomes to qualify for a large enough loan. If that's the case, try to get the mortgage with your combined income before you marry. Other alternatives include obtaining some sort of seller financing, making a larger down payment or waiting a few years until you've established a pattern of good credit as a couple.

Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Tips and Traps When Renovating Your Home," (McGraw-Hill, 2000).

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