Siblings who co-own houses together are both listed as "owners," or "vested owners," on a house deed; however, this does not necessarily mean that both siblings are on a mortgage note. Mortgage notes deal specifically with a home loan, not with home ownership. Essentially, a mortgage (or a mortgage payoff) cannot affect sibling ownership on the house deed.
Home Loans and Ownership
If you and your brother are on the deed to the house, but your brother paid off the mortgage independently, you both still own the house. The deed to the home is the ownership document. Changing ownership of the home can only be completed with a quitclaim deed (which conveys the ownership to and from others), not with the payoff on a mortgage.
A mortgage payoff references the paid-in-full status of a mortgage loan that is attached to a piece of property. It is possible for only one person on the deed of the home to be on the mortgage note. The mortgage note has nothing to do with home ownership (although anyone on the mortgage note must be an owner), it only has to do with who is obligated to repay the mortgage debt. Therefore, the person who repays the debt remains an owner, but does not change the ownership status of others on the property deed.
To change ownership of the property, you need not consult a mortgage note or an expired mortgage agreement. The debts on the property can never change ownership status on the deed. Instead, you must complete a quitclaim deed to change ownership. The grantor is the person who conveys property rights to the grantee, who receives a vested interest (ownership) in the property. This document must be completed with a notary present, notarized and recorded at a registry of deeds.
It is possible, particularly in family real estate arrangements, for "gentleman's agreements" to be conducted in the financing phase. This could lead to problems. For example, if you and your brother had an arrangement whereby he would pay off the existing balance on the mortgage for some kind of percentage ownership share in the sale of the property, it has to be in writing, as ownership of the property is equal on the deed of the home.
Based in Eugene, Ore., Duncan Jenkins has been writing finance-related articles since 2008. His specialties include personal finance advice, mortgage/equity loans and credit management. Jenkins obtained his bachelor's degree in English from Clark University.