Refinance question - 2 mortgage holders, 1 note holder

[ambiguator]

State: Pennsylvania

I'm refinancing my home and my fiancee's credit is bad enough to impact our rate.

My mortgage broker suggests that my fiancee should not be on the note, but that we'll both stay on the mortgage and title.

Can someone give me a little info about the legal implications as far as rights and responsibilities?

Also, if anyone knows, can you give me some info about the income tax implications as far as our filing status (when we're married vs. married filing separately)?

Currently I take a higher salary than her, such that I usually claim the entire tax benefit on interest payments.

Thanks in advance,
/a

 

[FlyingRon]

Your speaking gibberish. The note is the mortgage, and you'd be highly unlikely to find anybody willing to write a mortgage on the property without listing all the owners of the property.

What he probably was suggesting is that you get her to give up ownership and get the loan in your name alone. You can add her back later, but you risk having the bank call the loan at that point.

Mortgage brokers are general scum. Do not change the deed without talking to a lawyer.

 

[Renter02]

Ok so what your broker is trying to say to you is that everyone that is on title to the property does NOT need to be on the loan.

Pennsylvania is a Mortgage State not a Deed of Trust State. The difference between a Mortgage State and a Deed of Trust State is the procedures necessary to forclose on the property.

Your fiancee, at closing, would sign the Lien Perfection documents which are the Truth-in-Lending, Right of Recission (3 copies), Good Faith Estimate, RESPA and the Mortgage NOT the Note.

In the US a Note is a promissory note associated with a specified mortgage loan; it is a written promise to repay a specified sum of money plus interest at a specified rate and length of time to fulfill the promise. The Note states the amount of debt and the rate of interest, and obligates the borrower, who signs the note, personally responsible for repayment

While the Mortgage itself pledges the title to real property as security for a loan.

So in Pennsylvania the Mortgage is NOT the Note.

 

[ambiguator]

Thanks so much for the responses and a followup question:

Is it possible to add my fiancee / wife's name to the note in the future without changing the terms?

Are there any benefits or drawbacks to doing so?

 

[FlyingRon]

You can't without the permission of the lender (by the way they are the "holder" not you). I'll stand corrected by Renter02, but however, I find it highly unlikely that a lender these days will issue a mortgage without having all who are on the deed be listed on the mortgage. The last time I saw one proposing this, they wanted at the last minute the QC from the other person to get them off (never mentioned throughout the rest of the process).

If you do start this subterfuge, wait until *AFTER* you're married before making changes. Married couples get a bit of protection for making ownership changes without affecting the mortgage.

 

[ambiguator]

FlyingRon:
Thanks again for the advice.
I'll let you know how this pans out.

 

[ambiguator]

Follow up

Just wanted to let you know - this deal went through as documented.
My settlement was a couple weeks ago, and I just received my cash back check in the mail.

No last minute changes or shadiness.

 

[mbroker]

Your speaking gibberish. The note is the mortgage, and you'd be highly unlikely to find anybody willing to write a mortgage on the property without listing all the owners of the property....

The note is not the mortgage. They are 2 separate and distinct documents. You can have 1 person on the note and 2 people on the mortgage.

The note is the loan agreement with the lender and can have just one name on it. The mortgage is the lien on the property which gets recorded. Whoever is on the deed is required to sign the mortgage allowing the lien on the property.