A mortgage and deed go hand in hand, but the names on the mortgage don't necessarily have to appear on the deed, and vice versa. Since the deed states who owns the home, it is very important to make sure the names listed on the deed are meant to be there. You don't want to pay for a home that doesn't belong to you. Fortunately, any name errors you discover are easily corrected through a quick and simple process.
Names on the Mortgage
The mortgage names the parties held responsible for repaying the home loan. It doesn't convey ownership. In some cases, you need another person to help you qualify for the loan. Although they may not actually be helping you pay the loan, if you have a co-signer, they are responsible for paying the debt if you can't make the payments. However, the co-signer doesn't have to have any ownership rights to the home.
Names on the Deed
The deed conveys ownership. It is not uncommon for a name that isn't on the mortgage to be on the deed. The mortgage might list only one person, for example, because that person alone applied for and was approved for the mortgage loan. A person not listed on the mortgage, however, may still be listed on the deed.
How the names appear on a deed are also very important. Deeds reflect the name of a sole owner, the names of tenants in common, or the names of joint tenants. If one of two people who are joint tenants dies, his share of ownership automatically transfers to the other named party. With tenants in common, if survivorship rights are not specified, the home is distributed based on the deceased owner's will or state law.
Changing the Names
When life changes, the deed to your home may also need to change. If you are divorced and awarded the home, you will need to remove your ex-spouse from both the mortgage and the deed. A court order doesn't automatically grant ownership.
Refinancing is the only way to remove a name from a mortgage. To refinance without the other person, you will need to gain loan approval alone or with the help of a co-signer. A quit-claim deed is used to change how the deed is titled. One owner signs over ownership rights and a new deed is issued.
Errors on the Deed
Although rare, mistakes sometimes occur at closing. If you don't correct the mistake before the deed is filed, you will need to file a quit claim deed. When the title company is to blame, it will likely cover the cost of correcting the deed and may even pay for a real estate attorney to review the documents for you. At closing, carefully review the deed to ensure ownership is listed properly and the names on the deed are spelled correctly.
