When you close on a home, you have no idea what the future will bring. Whether you stay in the house for a few years or a few decades, your circumstances will likely change. If you later get married or find a life partner, adding someone to a mortgage without refinancing isn’t possible, but you can add someone to your deed.
TL;DR (Too Long; Didn't Read)
You cannot name additional parties on your mortgage loan, but you can add someone else to the property deed.
Adding a Name to Mortgage
Over the course of your time in a home, your circumstances may change, leading you to want to share the mortgage with someone else. But adding a co-borrower to an existing mortgage isn’t an option, as lenders issue those loans based on the creditworthiness and financial circumstances of the person named on the loan. If you want to share your loan with someone else, you’ll need to refinance in both your names, which will require going through the approval process again.
Instead of adding another person to your mortgage, often the best option is simply to put the deed in both names. You may still want to consider refinancing, but this will at least serve as some protection for both parties if something happens to the original mortgageholder.
Add Partner to Mortgage
Typically, if you’re interested in adding someone to a mortgage without refinancing, that person is a life partner or spouse who has moved in with you. Both of you may want to combine your finances, which may include sharing the debts that come with homeownership. It’s probably no surprise that lenders aren’t eager to add names to a loan without going through the same process you went through when you put a contract on the house.
The easiest method of adding a co-borrower to an existing mortgage is simply to refinance. In addition to having your partner’s name on the loan, this will also allow you to take advantage of a lower interest rate or get a reduced monthly payment. Whether you opt for this route or not depends on factors like how long you plan to remain in the house and what the current interest rate is.
Add Beneficiary to Mortgage
Another instance that inspires adding a name to a mortgage is if you’re considering what will happen after you’re gone. It only becomes more complicated when you realize the many things that can happen to a home after someone dies. You don’t need to add an heir to your mortgage before you die since it will usually automatically transfer to your heirs. However, if you have unpaid debts, your creditors may come after your estate to pay those debts.
Adding someone to a mortgage without refinancing could seem like a viable option to ensure your house ends up in the hands of a child or spouse. Since lenders won’t do that, it may be wise to refinance the loan in both your names before you die. You can also consider simply deeding the home to your beneficiary in your will, although it’s important to note whatever choice you make, your heirs should refinance the loan in their names to take over the mortgage.
Mortgage Versus Deed
Instead of adding a co-borrower to an existing mortgage, the best course of action is usually to add the person to the property deed rather than the loan. Whether you refinance the home or not, this is a wise course of action since it puts the property in both names. If something happens to the person whose name is on the deed, the surviving property owner will be able to stay in the house.
It's important to note that by not adding a name to a mortgage and instead adding the name to the deed, your lender’s interest in your property will come before your partner’s. In other words, if you default on your loan, all parties could lose the house, no matter whose name is on the deed. Having a spouse’s name on the deed but not the loan could also come back to haunt you if you later divorce since your spouse could end up with the home while you’re still paying the mortgage.
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a ghostwriter for a credit card processing service and has ghostwritten about finance for numerous marketing firms and entrepreneurs. Her work has appeared on The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30.