Did You Know that Borrowers Can be on the Loan and not on the Title? - Home Loan - Sun American Mortgage | Arizona, Utah, California (2024)

FAQs

Can a borrower be on the mortgage but not on title? ›

It is possible for a borrower to be on the loan but not on the title of a property. This can occur in situations where the borrower is acting as a non-occupant co-borrower to help a relative or friend qualify for a mortgage, but does not have any ownership in the property.

If your name on deed but not on mortgage death, you own the property if one of you dies. You are not liable for the mortgage loan if you do not have a mortgage. However, if your spouse dies, you inherit their interest in the property. The mortgage lender can evict you if you default on mortgage payments.

In title theory states, the borrower does not actually keep title to the property during the loan term. The seller gives the buyer/borrower a deed to the property but when the borrower signs the mortgage for the loan the borrower gives the title back to the mortgage holder.

What if you don't want your spouse on the title? This is absolutely possible; however, the spouse not on the title would need to sign some forms. A spouse would sign a disclaimer deed and a non-spouse would sign a quitclaim deed to say they are not claiming any interest, any ownership, to the property.

Even if one spouse is on the mortgage loan, you can still put both spouses on the deed, ensuring they both own the property.

What Does It Mean If Your Name Is Not on the Deed? If your name isn't on the deed, you're not the legal owner. However, in a divorce, the court looks at the contribution of both spouses to the marriage, which includes non-financial contributions, when dividing assets.

South Carolina's marital property laws are, like the majority of states, equitable distribution laws. Spouses in South Carolina have a right to all marital property. Marital property is all the real and personal property acquired by the parties during the marriage and owned at the date of filing for divorce.

Spouses who do not sign a mortgage deed retain a superior interest to the bank issuing the real property mortgage and may receive funds before the bank in a foreclosure sale. Additionally, a spouse who does not sign the deed during a sale of their spouse's property does not grant the purchaser complete ownership.

If solely in the deceased spouse's name

The surviving spouse can often assume the mortgage, but this process may involve credit checks and lender approval. If the surviving spouse cannot assume the mortgage, other options must be explored to prevent foreclosure.

To calculate your home equity, subtract the amount of the outstanding mortgage loan from the price paid for the property. At the time you buy, your home equity would be $17,500 or the amount of your down payment. For perspective, once you have paid off your mortgage you'll have 100% equity in the home.

Which of the following allows a borrower to avoid foreclosure? ›

The answer is forbearance. By temporarily reducing payments, borrowers can recover from their situation that is causing the risk of foreclosure.

The lender—known as the payee—is typically the owner of the original promissory note until the borrower repays the loan. In some cases (like for a mortgage loan), the note may also be held by a financial institution or investment group.

Ownership of real estate can get complicated in some scenarios. You might own a property with your name on the deed, but the mortgage—the loan used to buy the house—is in someone else's name. This can happen if you inherited a house, received it as a gift, or shared it from a previous relationship.

Conventional loans

Fannie Mae and Freddie Mac allow non-occupant co-borrowers. When using a conventional loan, the co-signer is required to sign the loan but does not need to be on the property title.

A co-borrower is a co-owner of the property. The co-borrowers name would be on the title of the home, right alongside yours. Beyond having their name on the title, co-borrowers' assets, credit history, employment history, and debts are assessed as they are also applying for the home loan with you.

Answer: FHA does not require the borrower to be on the title if they are a co-signer. However, if they are a non-occupant co-borrower, then they must take title. You would need to make this clear on the Loan Application and with the closing department so it is done correctly.

Deeds and Title Ownership

Whether the deed and/or mortgage are in one spouse's name or both, it does not affect the property's classification as marital or separate. What matters most is when and how the property was acquired.