Marriage changes more than just the box you check on a form inquiring about marital status. Marriage is a legal status that affects both spouses, including tax filing status and property ownership rights. Each state has different laws regarding how spouses own property during the marriage; those laws impact the ability of one spouse to secure a second mortgage.
In all states, if both spouses are on the title to the property, both have to sign a second mortgage. If two people own the property, the lender needs to make sure both agree to the additional debt secured against it.
The tricky part is where only one spouse holds title. Whether the non-owner spouse has to sign anything varies by state and by lender. State-to-state variations occur because of differing state laws on property interests. Even if only one spouse owns the property, the law may provide that the other spouse will gain an interest in the property just by being married to the owner. Lender-to-lender variations occur because the lender has to make sure that it can collect the money in the case of a default. Lenders have to interpret state laws and decide what documents will provide a comfort level that protects their interests.
The lender is the most protected if the spouse co-signs the second mortgage. This means that the spouse signs the mortgage document agreeing to allow the lender to foreclose on the house in the case of default, but not the promissory note that would create individual liability for the debt.
A spousal waiver is a written promise by the non-owner spouse to not make any claims that would interfere with the lender's rights to the value in the property. In some states, the lender will allow the spouse to sign this document for a second mortgage rather than requiring the spouse to co-sign the mortgage.
The least common situation, because it is the least protective of the lender, is for the lender to opt to allow the second mortgage without the spouse's signature. The lender might instead require documentation from the property owner to validate that the non-owner spouse has no community property or marital interests in the property.
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