Whose Names Go on the Mortgage?

Mortgages create legal relationships with detailed rules about borrowers and owners.

Mortgages create legal relationships with detailed rules about borrowers and owners.

Although most homes are purchased using mortgage loans, few borrowers completely understand the details involved with adding and subtracting owners from the mortgage or deed. Situations like marriages and divorces can prompt borrowers to want to change the names on their mortgages, but the situations in which banks will allow you to modify your deed or mortgage are very limited.

How Many Names Can Be on a Mortgage?

Although there is no stated limit of borrowers and co-borrowers on most mortgages, it is common practice to limit an application to no more than four names. Mortgage underwriters must verify credit, income and debt information on each person on a mortgage application, making applications with several borrowers difficult to underwrite. Any applicants who are approved through the underwriting process will be on the final mortgage.

Can a Name Be Removed From a Mortgage?

There are many ways to remove a name from a mortgage. For example, if a couple divorces, the one who keeps the house refinances it and secures a new mortgage in her name. Another option, when lenders will allow it, is filing a document called a release of liability that legally removes one party's liability from the mortgage instrument. With a release of liability, the remaining borrowers agree to assume the liability for the whole note by themselves. The borrowers who intend to remain on the mortgage must request permission from the bank for this remedy, but they or their representative must record the document. The primary advantage to a release of liability is that the note's repayment structure remains intact and no credit is lost for already-paid mortgage interest.

Does a Mortgage Have to Be in Both Married Names?

Married couples do not have to apply for a mortgage jointly if one person has the credit and income to qualify for a home alone. Generally, both spouses are not required to be on the loan. If your spouse has bad credit or a lot of debt, in fact, including him on the mortgage could negatively affect the size of your loan.

Can a Person's Name Be on a Deed Without Being on the Mortgage?

Generally, lenders do not allow people to be added to the deed without being added to the mortgage. While you can request that your title company file a document to add a person to the deed of your home, if you have not secured permission in writing from your lender, the lender may decide to call in the note when it discovers the change. A person who is added to the deed without being on the mortgage is not responsible for repayment and yet shares ownership, which is why lenders are very hesitant to allow this situation.

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