While the name on the mortgage can influence who is responsible for the debt, it doesn't necessarily dictate how the property is divided.
Resolving the mortgage can be done in two ways:
It is possible for a deed to be quitclaimed but for both divorcees to remain on the mortgage. If one decides to stop paying the mortgage, the other is obligated to make the payments. Failing to pay the loan would lead to default and foreclosure.
What Happens if One Person Doesn't Want to Pay the Existing Mortgage? Even if one person doesn't want to or can't pay the mortgage, both people are likely still on the hook for the debt. The lender can often come after either person for the full amount of the existing mortgage, no matter who is named on the mortgage.
What Happens If Your Spouse Is Not On the Mortgage. If your spouse is not on the mortgage, they are not responsible for paying it. However, the mortgage lender can foreclose on the house if the mortgage is not paid.
When there are two names on a title deed, it means that there are joint owners of the property and each person owns an equal share of the property. The mortgage does not need to include both names to be valid. Even if the mortgage only lists one spouse, it does not affect the share of the ownership of the property.
If your name is on the deed but not on the mortgage, your position is actually advantageous. The names on the deed of a house, not the mortgage, indicate ownership.
Can both spouses be on the mortgage but only one on the title? In certain cases, it may be desirable to have only one spouse's name on a mortgage for estate planning purposes, even though both spouses are paying the loan. However, this is generally not advisable as it may leave the partner not on the title unprotected.
Name Not On Mortgage But On The Deed A person's name may appear on a deed without being on a mortgage. But, doing so entails ownership risks since the title has potential encumbrances and liens. Having a free and clear title means the owner is the only person with rights to the property.
Put simply, lenders won't care who and how many people chip in to pay back a mortgage loan, as long as someone does. The only thing they will state is that both parties are liable for repaying the debt. A joint mortgage paid by one person is more common than you may think.
Who's going to get the house? Well, it's kind of a trick question because it doesn't matter. It doesn't matter whose name is on the deed or whose name is on the mortgage. Nine times out of 10 what matters is when the house was purchased and with what type of funds it was purchased.
In many states, courts will split the built-up equity in a home between the two divorcing partners. If you're keeping the home and you don't have enough cash to buy out your ex-spouse's share, you'll need to use the home's equity for a “divorce and mortgage” buyout agreement.
Until the divorce is officially finalized, both spouses may still have shared financial obligations, but temporary agreements or court orders may determine the specific financial arrangements.
You can make an application for a transfer of equity. This can enable you to remove your ex-partner's name from the mortgage and transfer ownership of the property into your name only. You will need to speak to your ex-partner to make sure they agree to this before contacting your lender to make the change.
If you need to remove your ex's name from a mortgage without refinancing, you could request a quitclaim deed (a legal document that allows you to transfer interest in real estate as a grantor to a grantee).
To remove your name from a mortgage, you and your co-borrower can ask the lender for an assumption or modification that would remove your name from the loan. If the lender won't change the existing loan, your co-borrower will need to refinance the home into a new mortgage.
As joint tenants:
You can take an itemized deduction for one-half of the mortgage interest, and your ex-wife can take the other half as an itemized deduction. You can deduct half of the mortgage interest and one-half of the mortgage principal payment as alimony (and your ex-wife must report these payments as alimony).
The process of removing yourself or someone else from a joint mortgage is relatively simple and straightforward—as long as everyone is in agreement and wants the same result.
Paying down someone else's mortgage with no equity to show is exactly what we renters do every month. That doesn't mean you should make 50% of the payment, given the income discrepancy. And since you don't have a stake in this home, he should pay 100% of ownership costs, like home insurance, property taxes and repairs.
If your name is on the deed before your spouse signed the mortgage, then normally the bank can only foreclose on your spouse's share of the home. Generally, your name is on the deed to the home, then you you own an interest in it. The bank cannot foreclose since you did not transfer your interest to the bank.
When evaluating borrowers for a joint mortgage, the lender cares less about who is listed first, and more about the sum of the applicants' earnings and debts. In general, the lender evaluates the application the way the applicants submit it, without regard to whose name is listed first.
If you and your ex-spouse's name are on the mortgage, you will both be held liable for the mortgage unless you refinance it out of their name.
In our example, if the husband had a will then the house would pass to whomever is to receive his assets pursuant to that will. That may very well be his wife, even if her name is not on the title. If he dies without a will, state laws will determine who is entitled to the home.
Another reason is for creditor purposes. If one spouse has a debt, a creditor will not be able to make a claim against any jointly owned assets. Some concerns to address before putting one's spouse on a deed include whether your spouse has any judgments against them.
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.