Adding Someone to Mortgage

Whether you buy real estate for a home or as an investment, ownership is defined by its title

When thinking about investing in real estate, remember that it includes both buildings and the land they sit on. This land can have plants, natural resources, water, and crops. It can be either commercial, which is for business, or residential, which is for living in or renting out as an investment.

Adding Someone to Mortgage - Understanding Titles

When you own a property, you are listed on the title. Real estate is a type of property that gives you ownership rights. You have these rights as long as your name is on the title. However, these rights must be transferred when the property is sold.

There are different types of real estate ownership. Each type affects how ownership is transferred, financed, used as collateral, and taxed. Each of these title types comes with its advantages and disadvantages. They will depend on the person's situation and how ownership changes during major life events. These events include divorce, selling a house, 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 called "a right of survivorship." Joint tenants usually start their tenancy at the same time through a deed. Unlike other methods of adding someone to the mortgage, joint tenancy does not need a blood or marriage relationship.

Adding Someone to Mortgage- Tenancy in Common (TIC)

Tenancy in common is different from joint tenancy. In this arrangement, two or more people own real estate together. Each person can have equal or unequal shares 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.

Unlike joint tenancy, a tenant in common owns their part of the property individually. They can do whatever they want with it. 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’. This means that if one owner dies, the whole title automatically goes to the surviving owner.

How else to hold title when Adding Someone to Mortgage

There are other, less common ways for people to own real estate. These include Partnership Ownership 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, shareholders own the real estate. However, this property is seen as separate from the other shareholders. If you want to add someone to a mortgage, either for a home purchase or refinancing, contact Mortgage Quote. We can help you find out if one of our lenders will allow this.