1 TO BUY, 2 TO SELL
TRUE OR URBAN MYTH?
Technically speaking, the statement “one to buy, two to sell” is true. A non-signatory spouse has a marital interest in the property by act of law whether they sign the Deed of Trust or not. However, most lenders in the market today will not approve a loan application if both spouses do not agree to sign the Deed of Trust (among other documents).
This situation is created most often when one spouse applies and is approved for a loan independent of their spouse. For example, John and Jane Doe decide to buy a home. John has a substantially higher credit score than Jane. Consequently, the loan officer securing their loan for them home loan suggests that only John apply for the loan. As such, Jane will not be responsible for repaying this loan, but she still maintains a marital interest in the property.
One restriction that the lender often puts in place is the requirement that both spouses sign the Deed of Trust. This requirement does not enhance the lender’s lien on the property – in fact, it can be argued that the lender receives no advantage whatsoever from this requirement – but they still have the right to require both signatures. Remember, it is the lender’s money at stake and they do not have to loan it unless their particular requirements are met. If the lender requires the borrower’s spouse to sign a portion of the loan package, then that is exactly what the borrower’s spouse will have to do.
North Carolina General Statute § 39-13.
Spouse need not join in purchase-money mortgage.
The purchaser of real estate who does not pay the whole of the purchase money at the time when he or she takes a deed for title may make a mortgage or deed of trust for securing the payment of such purchase money, or such part thereof as may remain unpaid, which shall be good and effectual against his or her spouse as well as the purchaser, without requiring the spouse to join in the execution of such mortgage or deed of trust.
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