Getting a mortgage as a couple: It's not for everyone

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When you're buying an apartment in a place as expensive as New York City, it helps to be part of a couple -- with two incomes and more assets between you, in theory, you should be able to afford double the amount of space and find it easier to qualify for a mortgage.

But co-signing on a loan with a significant other also means that each of your credit histories will be judged--and affected if you default on payment--and that things can get hairy if you break up. Plus, it usually means double the paperwork (detailed financial documents for two people) during the application process.

Here are the most important issues to consider when applying for a mortgage with a significant other, according to Robbie Gendels, a vice president and loan officer at National Cooperative Bank.

Credit scores: When two people are applying for a mortgage together, the bank only looks at one person's credit score. Unfortunately, it's the lower of two credit scores. That means that one person's less-than-stellar credit score can hurt the chances of your getting a loan or the best rate.

Gifting the downpayment: If for some reason--like bad credit--it makes more sense for only one of you to take out the loan, your significant other can still help with the down payment. "It would just be considered a gift," says Gendels. Just note that some co-op boards may ask why only one of you is listed as a borrower.

Married vs. single: Gendels says that as far as her work is concerned, it makes no difference whether a couple is married or not.  The process for applying for a loan is the same. You just need to make sure all documents are in order and that all pay stubs, proof of employment and the like are accounted for.

Breaking up is hard to do: It goes without saying that you should be seriously invested in a relationship before you buy an apartment together. But, of course, many relationships end. And if and when that happens, "the person who's keeping the unit has to refinance their loan to get the other person off of it," says Gendels. That means that the person who's staying on the loan will have to qualify for it alone and that one of you will be on the hook for refinancing costs (usually several thousand dollars in appraisal and other fees) as well as a lot more paperwork. Plus you'll have to get the co-op board's approval.

Robbie Gendels (646-201-4713) is a mortgage loan officer at National Cooperative Bank in Manhattan. 

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