Updated on 05.19.07

Marriage and Mortgage: A Reader Wants To Know

Trent Hamm

A reader wrote in recently asking whether or not wedding bells should be in his future. What do you think?

My fiance and I are considering marriage. However, it seems like financially, marriage is a mistake. We both work full time and it seems like a greater proportion of our incomes would now go into a higher bracket. Are there any tax benefits to being married that might offset this?

If your salaries are very similar, then yes, you will pay more income tax as a married couple than as singles. If your salaries are far apart, however, there is a tax benefit for getting married and the wider the gap, the better.

However, marriage comes with many other financial benefits. If one of you has excellent health care coverage and the other has mediocre coverage, you can likely both be able to have the higher quality coverage for little cost to you. Insurance rates, particularly for auto insurance, are lower for married couples (significantly lower in our case). Plus, if one of you meets an early end, the benefits of being married are tremendous: the longer-living spouse gets Social Security survivor benefits, automatic inheritance rights (if you’re not married and one of you dies, you’ll lose a lot of money dealing with probate), and you don’t owe any estate tax, either.

My wife and I were making very similar salaries when we got married, but after combining our auto insurance and indicating we were married as well as combining our health insurance, we ended up saving money over the course of a year even with slightly higher income tax.

Also, when we go to buy a house, should we put both our names on the mortgage application? How are you and your wife handling this?

If one of you has terrible credit and the other has really good credit, then just one of you can apply for the mortgage, but lenders will only lend you an amount that could be repaid with annual payments equal to 28% of the combined salaries of the people on the mortgage. So, if you’re both making the same salary, having only one of your names on the mortgage means you can only borrow half as much as you otherwise could borrow. My wife and I both have very good credit ratings, so we both put our names down, enabling us to borrow pretty much any amount we wanted.

The only time I can think of when marriage isn’t financially beneficial is when you think there’s a good chance that divorce may follow it.

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  1. jake says:

    “if you’re not married and one of you dies, you’ll lose a lot of money dealing with probate”

    That would scare me the most. You not only have to deal with the loss of a love one, but you also have to worry about legal issues. I can see a nightmare that can develope as a result.

    For me marriage is part religously motivated and the other part family. Family being that it wouldnt go over so well with my parents and other relatives if we stayed singles.

  2. guinness416 says:

    Some employers have entered the 21st century and do give health benefits to domestic partners. Worth checkingout. That was certainly the case for us, before getting hitched.

    Also, if you put one party on the mortgage application, you can still add them to the title of the house – but in our experience it costs more to add a partner than a spouse.

  3. Bill says:

    Probate – no need for that at all, married or not, if you use such estate planning tools as a revocable “living” trust.

    That type of trust was a godsend when my mom was ill – we set it up w/ me as a co-trustee, and moved eveything into it.

    She died last year – I didn’t even bother to open an estate – just transferred (almost immediately) what was left to her beneficiaries.

    You really do not want to die intestate, whether or not you are married.

    At the very least have a will.

  4. Ben M says:

    With a question like this, you have to look beyond just the financial.

    Marriage has enormous social, financial, mental health, and other benefits. A quick google search on “benefits marriage” gives a number of useful results. One that caught my eye is:


    Full disclosure, I’m with Jake in that religion requires marriage and I am happily married and intend to stay that way.

  5. This is what I was telling my friend yesterday. One of the easiest ways to increase your wealth is by getting married.

  6. kim says:

    If your reader is still only considering marriage then she does not have a fiance. Semantics dictates that the commitment to marry has been made at that point. The institution of marriage seems to be crumbling at our feet. If you are only considering marriage for the financial benifits then do not do it. Your divorce will cost too much when the going gets tough. Get married when you find a stable person with similar goals and dreams – but only if you wake up each day knowing that you want to be with that person forever. If that is not the case then you have a great friend or a wonderful business partner, but not a mate. Oh, one more thing, don’t marry anyone you have not known well for at least two years, prferably longer. Dating is also cheaper than divorce.

  7. MVP says:

    Wow. What a question. This is something that I seriously did not consider before I got married. Strangely, I was mulling over silly things like, “Will he be a good father and provider? Will he stand by me through thick and thin, rich and poor? Will he still love me once we’re old and gray?” It never entered my mind to consider, “Will he put me in a higher tax bracket?”

    I hope I made my point. While I suppose it can be beneficial to have this information before getting married, in my opinion, the fact that the reader seems to be hinging this life decision on the potential financial benefits or pitfalls makes him/her pretty shallow and he/she needs to rethink his/her values.

  8. plonkee says:

    I guess this question and the following comments go to show that there is a difference of opinion regarding whether marriage is a different state of affairs (outside of tax/legal implications) to living together without marriage.

    If both of you think that it is not different, it makes perfect sense to consider the financial implications (and legal implications). Thats not being shallow its taking into account the values of the couple. Not everyone needs a marriage certificate to be totally committed, although I might.

    On a slightly separate note, I’m sure that I’ve read something else about remarriage and supporting step-children through college that can have serious financial implications.

  9. Elizabeth says:

    I’d like to assume that the writer uses “fiance” in the sense of “the person I want to spend the rest of my life with, whether we get a piece of paper from the government about it or not.”

    But I really wanted to point out that Trent’s point about health insurance is not always true. For example, my employer doesn’t have a “couple” form of health insurance — you either pay a “single” premium or a “family” premium. AND they don’t subsidize family members, only the actual employee’s coverage. As a result, the increase in my premium to add my healthy, self-employed husband to my health insurance would be far more than we pay for his individual insurance policy. (However, if he were not a healthy young person it might well be worth it to have the group coverage.) Just another example that figuring out the financial implications of getting married can be very complicated.

  10. Marle says:

    I know this topic is ancient, but I saw it in the time machine post, and I want to respond to Kim’s comment that “If you are only considering marriage for the financial benifits then do not do it.” The financial(and legal, etc) benefits of getting married are the only reasons to get married anymore. I lived with my husband for 3 and a half years before we got married, and what did marriage change? I had health insurance once we were married. I love him and would like to stay with him for the rest of our lives, but if it wasn’t for the fact that I have asthma and was uninsured while he had great benefits then I doubt we would have gotten married. A marriage license is a piece of paper. It tells the government (and other organizations) that you two are family, but each couple’s relationship is different, and it’s not defined by a piece of paper.

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