Adding Someone to Mortgage

Whether you’re purchasing a property as a primary residence or an investment, real estate ownership is defined by its title. Real estate encompasses the land and any structures on it, including vegetation, natural resources, and crops. It can be classified as commercial (for business purposes) or residential (for living or rental investments).

Understanding Titles

When you own property, you’re listed on the title, which represents your ownership rights. The title must be transferred when the property is sold. There are various forms of real estate ownership, each with its own implications for transferring ownership, financing, collateralization, and taxation. The choice of title can affect how ownership is transferred in events like divorce, property sales, or death.

Adding Someone to the Mortgage

Joint Tenancy

In joint tenancy, two or more people share ownership of the property equally. Each joint tenant has equal rights over the property, and upon the death of one tenant, their ownership rights pass to the surviving tenants, a concept known as the “right of survivorship.” Joint tenants typically enter into this arrangement simultaneously through a deed, and it doesn’t require a blood or marital relationship.

Tenancy in Common (TIC)

Tenancy in common allows two or more people to hold title to the property with either equal or unequal shares. For example, Tenant A might hold a 30% interest, while Tenants B and C each hold 35%. All tenants have equal rights to use the entire property, not just their percentage. Unlike joint tenancy, each tenant in common can individually transfer their share of the property and leave it to others upon their death.

Tenants by Entirety (TBE)

For legally married couples, tenants by entirety means that the property is considered owned by both partners as a single entity. If one partner dies, the entire title automatically transfers to the surviving spouse.

Other Ownership Structures

Less common ownership structures include partnership ownership and corporation ownership. In a partnership, multiple individuals or entities co-own the property, with some partners taking on limited liability and not participating in management decisions. In corporation ownership, the property is owned by shareholders and treated as a separate legal entity from the shareholders.

If you’re considering adding someone to your mortgage, whether through purchasing or refinancing, contact Mortgage Quote to find out if one of our lenders can assist you.

Sources
“5 Things to Know Before Adding Someone to the Deed”
“Should You Add a Co-Borrower to Your Mortgage?”
“Joint Tenants With Right of Survivorship (JTWROS)”