Does Having Your Name on a Mortgage Deed Affect Your Credit?

A mortgage deed obligates all signers to loan repayment.

A mortgage deed obligates all signers to loan repayment.

The term "deed" is sometimes used in flexible ways in real estate and mortgage financing. In truth, however, there are very fixed definitions of the different types of deeds associated with real estate. Understanding the difference between the various forms of deeds is critical to home loan financing and responsible credit management. If your name is on the mortgage deed, you have a responsibility to repay a mortgage loan.

The Mortgage Deed

By signing a mortgage deed, you re agreeing to repay the mortgage loan according to the terms of the mortgage note, which spells out the particulars of the mortgage rate, payment and amortization schedule. The mortgage deed is the legal document which, after closing, is recorded at your local registry of deeds. The registry maintains copies of all current and former property documents for the county it serves. As a signer on the mortgage deed, you are a central player in the repayment of the house debt.

Mortgage Deed and Credit

As a signer on the mortgage deed, you are an obligated party to a mortgage debt. Nearly all mortgage lenders and banks report mortgage repayment history to the three main credit bureaus: Equifax, Experian and TransUnion. Therefore, your payment performance on the mortgage loan will reflect on your credit report. Indeed, mortgage debts are considered very significant on a credit report, and failure to pay, default and foreclosure will all have serious and negative consequences on your credit.

Deed Confusion

The word "deed" can be a confusing real estate term. As mentioned, a mortgage deed reflects ownership of a mortgage debt. However, a property deed reflects ownership of the property itself -- not the debts attached to that property. In addition, a quitclaim deed is a document that is used to convey ownership from one party to another. Finally, a deed of trust is a term that is synonymous with mortgage deed.

Credit Effects

It is possible to be a signer on a mortgage deed yet not pay the mortgage loan. This is uncommon, as all signers on the mortgage deed are certainly obligated to maintain repayment on the account. However, it is possible for someone to cosign a mortgage so that another party can obtain a more favorable rate or fee scheme on the mortgage loan. However, the dangers of cosigning a mortgage are potent. If the other party fails to make payments, it's the cosigner's responsibility to repay the mortgage loan.

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