Multiple people may own a home together with only one person's name on the mortgage. Many different reasons exist for why this may be the best way to finance a jointly owned home. If someone purchased a home before meeting a spouse and wanted to add the new spouse to the title of the home, a mortgage refinance is not always required.
Mortgage Obligation and Ownership
The title for the home documents who legally owns the home. The mortgage note filed with the county documents who owes the mortgage company money that the home secures. Adding or removing a person from the title of the home requires filling a quitclaim deed with the county. A quitclaim deed simply transfers ownership, and has no affect on the mortgage note. Changing borrowers on a mortgage note usually requires refinancing the mortgage or changing borrowers if the mortgage is assumable.
If one spouse or partner has excellent credit and can qualify for the mortgage and the other has credit issues, or for some other reason cannot qualify for a mortgage, the mortgage company may actual require only one borrower on the loan. If one spouse earns very little money or has a lot of debt, it may be easier to only use the stronger borrower. Once the home purchase closes, simply ask the title company to prepare a quitclaim deed to add the other spouse after closing.
The reverse is also true. One person can own the home while two appear on the mortgage note. This often happens in divorce situations where one spouse is awarded the house but the home's mortgage is not refinanced. The judge may not require the mortgage be taken out of the other spouses name immediately. If the spouse who retained the home has paid the other spouse all of the required equity, a quitclaim deed may be executed removing the non-occupant spouse from the title.
County Clerk and Recorder
Contact your county's Clerk and Recorder's office for details on this procedure. While the process is fairly uniform, some counties may require their own specific form. Additionally, each county requires their own filing fees which are due when the document is filed. Often the Clerk and Recorder's office provide exact instructions for filing a quitclaim deed in your county.
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