Can same-sex couples refinance?

Although lenders always could consider two incomes in cases of two homeowners, some new rules may change tax implications.

By MSN Real Estate partner Dec 26, 2013 10:36AM

 © Comstock, Getty ImagesBy Don Taylor, Bankrate.com

 

Q: My question involves refinancing of mortgages for gay couples. I have poor credit after the loss of my job many years ago. However, I always ensured that my mortgage payments were made.

 

The payments were late several times; however, it was always the first bill paid, regardless of my other bills.

 

Recently, my state government accepted our same-sex marriage and I'd like to know whether I can qualify to refinance the mortgage based on my spouse's income.

 

Post continues below

 

A: There's been a lot of good news for gay and lesbian couples in recent years where states have allowed them to marry. Also new: the federal government granting tax benefits to these couples.

On Aug. 29, the Internal Revenue Service announced: 

The U.S. Department of the Treasury and the IRS today ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple live in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

Under the ruling, same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

 

The following month, the IRS issued Notice 2013-61 providing guidance for employers and employees to claim refunds or adjust overpayments of FICA taxes and employment taxes with respect to certain benefits and remunerations provided to same-sex spouses.

Depending on how long you've been married, you may be entitled to refunds for the 2010 through 2012 tax years based on the new ruling. This would be a good time to work with a tax professional to explore these issues further.

 

You've always had the ability to own the house with your partner, now your spouse, and to have the lender consider both incomes and credit histories in considering a loan application. The issues prior to the ruling largely dealt with gift-tax ramifications when gifting the equity in the home to your partner so that both of you would be on the deed and the loan for the property, estate planning implications and how the property was titled. The change in the tax ruling treats same-sex spouses the same as heterosexual spouses when it comes to these issues.

 

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Tags: loans
 
25Comments
Jan 4, 2014 9:43PM
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Refinancing isn't a gay or straight issue.  It depends on a lot of different factors.  My partner and I have owned 2 homes together and have refinanced each of them when better rates became available.  The only hoops we had to jump through were our credit history and scores.  I hate that there is so much focus on gay/straight.  There is really no difference between us except who we love.   
Jan 4, 2014 9:29PM
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I'm currently living with my best friend, companion, and soul mate, a Great Dane! ..I'm wondering, if at sometime in the near future, I'll be able to refinance with him so as to minimize my tax liabilities and ultimately pass the estate onto him and his next of Canine!!
Jan 4, 2014 9:06PM
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This whole issue of same sex marriage just gets on my nerves.  I pray that one day the this will all disappear.  This is not love between a man and a women, this is not the same love as girl friends who are just that.

The fact that this even assist makes me wonder what's next.  A civil Union just could not work, even if you were entitled to same benefits as a man and women being married, with the exception of anything federal. No you had to push and keep pushing.  You had to give millions of dollars to the Obama campaign. Sadly one day this will all come to an end.

You have caused such diversity between Americans, even involving religion. You stalk advocates, you say awful things about Christianity and about Heterosexuals.  You are no better then those mentioned.

It's a sad time for the US, that is no longer united!!!!!
Jan 4, 2014 8:08PM
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I'm so sick of hearing about gays and lesbians! Talking like it's such a normal way of life doesn't make it so. 
Jan 4, 2014 5:31PM
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Their lifechoice should not even be involved?  Just another way to make sure we do not forget their Special Rights argument, and to push their immoral behavior into everyday life! I'm sure they will get special consideration and the banks will not want to offend gay couples so they will get special rates while everyone else picks up the slack with higher rates!
Jan 4, 2014 2:59PM
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I think we should think about big corporation not paying their fair share of taxes, with off shore accounts and p.o.bx headquarters in other parts of the world to avoid taxes. or we can gloat from our  cloud pedestal with our minds on another mans di*k he*d, saying he's gay, but yet your mind is on his c*ck( who's the true f*g?) both.
Jan 4, 2014 2:01PM
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     IS THIS A GROUP VOTE?  WHAT HAS HAPPENED TO OUR COUNTRY THAT THE SUPREME COURT HAS TO LEGALIZE SODOMY.
Jan 4, 2014 8:32AM
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Of coarse they can through Fanny May.
Jan 4, 2014 8:04AM
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Regardless of sexual orientation, there have always been ways of adding other individuals to a new loan refinance in order to qualify. 

 

FHA has allowed for even non-occupying co-borrowers to be added.  FNMA's rules are a bit more complicated but fall under their "continuity of obligation" guidelines which can be "Googled" for a complete explanation.  Basically, FNMA has escalating criteria to follow depending on the loan-to-value ration percentage (the percentage of loan amount compared to the appraised value).  But if the hoped-for new borrower lives in the home, has been on title for 12 months, and/or made the mortgage payment for 12 months, he or she can be added to the new loan and help the original borrower qualify easier.  At lower LTVs, less stringent rules apply.

Jan 4, 2014 6:59AM
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Hey Linda, better let the dogs in.............the freaks are back again!
Jan 4, 2014 4:48AM
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LMAO! this gives FICO a whole new meaning!
Jan 2, 2014 9:33AM
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Really???  Articles on buttbuddies finances?  PATHETIC

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