Adding Someone to Mortgage
Whether buying for the reason of being a primary resistance or to have as an investment, real estate ownership is determined through its title
When considering investing in real estate, it is worth noting that real estate is defined by structure and the land that it is on - including vegetation, natural resources, water, and crops that are on the land. It can be either commercial (intended for business) or residential (for the purpose of living in or renting out as part of the investment.
Adding Someone to Mortgage - Understanding Titles
When you own a property, you are listed on the title. Real Estate is a type of physical property that gives you ownership rights while your name is on the title but must be transferred when the property is sold. There are several forms of real estate ownership out there, each of which having specific implications on the transfer of ownership, financing, collateralization, and taxation. Each of these title types comes with its advantages and disadvantages. They will depend on the circumstances of the individual and how the ownership is passed in the event of major life events such as divorce, house sale, or death.
Adding someone to mortgage - Joint tenancy
When two or more people are on the title for real estate ownership, that is also known as joint tenancy. Joint tenants will have equal rights over the property for the duration of their lives. In the event of death for one of the partners, the rights of ownership are then passed onto the living tenants. This is also known as ‘a right of survivorship’ Joint tenants will usually enter their tenancy at the same time and will occur through a deed. Unlike other ways of adding someone to the mortgage, joint tenancy does not require there to be a relationship through blood or marriage to be set in place.
Adding Someone to Mortgage- Tenancy in Common (TIC)
Tenancy in common is a little different from Joint Tenancy in that when two or more people hold title to real estate, they each have either equal or unequal percentages of ownership. For example, Tenant A could have 30% interest, and Tenants B&C could have 35% interest each.
All other aspects of the property are shared by the named people on the title. Tenant A doesn’t only have access to 30% of the physical property for 30% of the time. Each tenant has the same right to use the entire property for the entire time.
However, unlike joint tenancy, a tenant in common will hold their title individually for their portion of the property and can do with it what they will. This type of title can be entered at any time- even several years after the other owners have entered the agreement. Tenants may choose to leave their portion of the deed to other parties in the event of their death.
Adding Someone to Mortgage - Tenants By Entirety (TBE)
For legally married owners, becoming Tenants By Entirety is made under the assumption that the couple is legally ‘one’. So that means that should one of the owners die, the entire title is automatically transferred to the surviving holder.
How else to hold title when Adding Someone to Mortgage
There are other, much less common, ways for people to hold real estate titles such as; Partnership Owners and Corporation Ownership.
A partnership of two or more people is an association of two or more people used to run a business as co-owners. There are some instances where a partnership is formed for the sole reason of owning real estate. They can also be known as limited partnerships. Here, investors will take limited liability and won’t make managerial decisions. One general partner will typically be responsible for making all business decisions on behalf of limited partners.
In a corporation ownership situation, the legal entity of real estate is owned by shareholders but legally regarded as separate from other shareholders. If you are interested in adding someone to a mortgage, whether it is by way of a home purchase or refinancing your mortgage, then connect with Mortgage Quote to see if one of our lenders will allow this.
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Joint Tenants With Right of Survivorship (JTWROS)