Does It Matter Whose Name Is On Your Mortgage Or Deed?

Do you want to apply for a mortgage in order to buy a home? You're about to enter the exciting world of homeownership, but you probably also have many questions. For couples who must decide whether to apply for that mortgage as a couple or individually, this also includes how that decision affects other aspects of homeownership.

To help you make the right choice for your family, here's what you need to know about the effects of individual or shared mortgage loans. 

1. Who Owns the Property?

While the mortgage on a property and the deed to it are often inextricably linked, they are not the same thing. Ownership goes with the title or deed, not the mortgage loan.

Therefore, if you choose to have both parties on a loan application, you can still choose to put only one on the deed. And the reverse is true — you can put both on the deed no matter who is or isn't on the mortgage loan. Some couples do this if one partner can't be on the mortgage due to poor credit or lack of work history. It can also make the transfer after one passes easier. 

2. Who Is Liable for the Mortgage?

Liability for the mortgage loan rests solely with those who sign their name on the loan contract. This may seem odd since a person can have an ownership stake in the property without responsibility for the payments.

However, keep in mind that the mortgage lender still has an interest in the property as well. Therefore, the asset itself isn't free and clear just because you aren't on the mortgage contract. 

3. Who Gets the Property in Divorce?

Finally, how do the names on both documents affect division if you end up divorcing later? This depends on the state in which you live. In some states, the name on the deed is the legal owner and property is not necessarily divided equally. If you live in these states, it's very important to make sure the right persons are on the deed. 

In states which follow the community property standards, though, marital assets are divided without regard to whose name is actually on the deed. These may be equally divided or equitably divided based on factors related to the marriage. 

Where Can You Learn More?

Do you have more questions about putting one or both spouses on a deed or mortgage? Want to know more about your state's approach to ownership of the marital home? Begin by meeting with a fixed-rate mortgage lender in your state today.