This is always a very important decision and consideration when buying a home - Think this over hard! Important advice from a knowledgable Maryland mortgage lender . . .
Should I Put My Girlfriend or Boyfriend On The Deed to the House?
I got a call from a young lady buying her first home. She asked about putting her boyfriend on the title to the home. They plan to be married eventually, but have no current plans.
Some things to note: All of the money that is being put into the home for down payment and closing costs is coming from her accounts, adding him to the mortgage would hurt their ability to qualify for the home and they plan to share expenses.
The borrower is going to have to make her own decision based on all the information available. There are many things to consider when purchasing a home with someone other than a spouse.
1. Some loan programs/lenders will not allow a person who is not on the mortgage to be on the deed. They do not want someone who is not obligated to pay the mortgageThey can be added later, but there will be additional costs involved. There is also a possibility that the lender could consider this to be a material change and call the loan due.
2. VA (Veteran's Administation) do not allow a non-spouse to be on the mortgage.
3. If someone is on the deed, but not on the mortgage, they have all the rights, but none of the financial responsibility.
4. There can be big, expensive legal ramifications in the event of a break-up.
Though having both parties on the deed would effectively give them equal control over the property, it would also add complications if they were ever to choose to live apart. If someone is paying toward the mortgage, understandably, they will have a desire for some protection. There are ways to gain protection without incurring a great deal of cost.
Some thoughts on avoiding the tug of war...NOT LEGAL ADVICE, please consult a real estate attorney!
A separate document could be drawn up by an attorney to protect both parties interest in the property. Two examples of this may be:
1. Add a second deed of trust in an amount that represents the other party's interest in the property. This would need to be subordinated in the event of a refinance and could cause complications in that instance. It would need to be paid off in the event of a sale. Ideally, any agreement related to this should be held in trust (by a disinterested party) so any future actions can take place based on a firm agreement. One option would be to have this drawn up, signed, and notarized but not recorded.
2. Promissory Note, signed and notarized, acknowledging a sum due that represents Mark’s interest in the property should you choose to live apart. It should include payment terms that would start once exercised and maybe expiration date if not exercised.
In the event that she and her boyfriend get married down the road, it is pretty easy and relatively inexpensive to add the spouse to title in Maryland. Other states may differ. Holding title as “tenants by the entirety”, once married, is the most secure way to hold real property.
No one ever expects a relationship to go bad, and hopefully it will be all wine and roses…BUT, putting something in place early, filing it away, and focusing on living a happy life together protects both parties.
I am not a lawyer and this is not meant to be legal advice. If necessary, counsel should be sought.
Bridget McGee Maryland Mortgage Mama NMLS# 196068 CrossCountry Mortgage, Inc. 410-960-2061 EHO email@example.com or firstname.lastname@example.org
If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure!
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