My wife and I are talking with a lender about refinancing our home loan. Currently, our loan is in both of our names, as is the title. (This is a Lien Theory state, if relevant.) The house was purchased after we were married, in a common-law state.
My credit is substantially better than hers, such that our rate would be 1/8 point lower if the loan was solely in my name. She works part time, but my income is sufficient to get the loan entirely in my name (yay for buying less than we can afford!). The mortgage company has said they can do this without changing the title (ie, title would be joint still, but the mortgage would be mine alone.)
Is there any reason to choose the higher rate, keeping her on the mortgage? This should be both from her point of view and mine. Does this have any effect on what would happen in the case of a divorce, and if so, what? (We're not expecting to do so of course - but want to think about every aspect of it before making a decision.) 1/8 point in this case works out to about $2-3k more in total interest paid over the lifetime of the loan.