Posted on: 23rd Jan, 2008 04:30 am
I know this question is asked a lot but I am asking prior to being in the situation so I'm wondering if there is anything I can do proactively. I am engaged and we have been pre-approved for a mortgage, but should we break up prior to marrying (I want a long engagement) we already decided that I would keep the house and he would move on. I understand that mortgages may have release clauses and I'm unsure if mine will or not (because the full paperwork has yet to come in) but I am wondering what I need to ensure our loan says about releasing him if need be as well as if there is anything he should sign now or be prepared to sign later if need be. I am also wondering if there are any benefits to keeping my name alone on the deed and his name on the loan and adding his to the deed if and when we are married. I especially want protection since he now says if he leaves he will not ask to be bought out (I don't know the legality of this), instead considering his mortgage paid up to that point to be rent of sorts.
Why don't you just get the loan in your name then? If you are both getting the loan.......removing him from title can trigger the lender calling the loan due.......and lenders very rarely just "remove" someone from the note.....So your best bet would be to just get the loan in your own name.
I thought of that except he has a better debt to income ratio than I do because I am a graduate student with a boatload of loans. This way we lock in the best rate (so I assume). I know they don't remove people from loans easily, but I read that it can be done and I intend to check the paperwork to see what clauses there are when I get it. I thought there was something called a release and assumption clause, which allows for that. I didn't know that removing him from the title could trigger the loan being due, though in theory it makes sense. Any additional information would be useful.
No offense either, but your tone seemed a bit condescending (though I could be way off, and apologize in advance if that is the case) and I'm not sure if my question offended you in some way but please keep in mind that you are providing a wonderful service by being a professional offering free advice, but those of us who seek it are people as well and tone (even in typed words) can make an insightful response seem negative.
The comments where not meant to be negative......most mortgages written today are not assumable.......There are exceptions.....but I would not plan on it..........so if it's an assumable loan you want...you will need to ask the lender or broker upfront if it's assumable......and then you need to be able to qualify on your own.......so if the DTI is high now.......unless you are planning on seeing a major increase of your income.......(which i would assume is possible as you are still in scholl from the sounds of it) That will be what you are up against.......Just keep in mind the lender has the final say as to weather or not they will allow an assumption.....and the other thing to be aware of.......is that in certain states......MD as an example......the cost of removing someone from title can be several thousand dollars.....so it's something else you need to look into... and I guess my final point is.......that agreements.......are null and void once that paperwork is signed.......if you split up......there is nothing you can do with out his signature........sell or refi.......
The comments where not meant to be negative......most mortgages written today are not assumable.......There are exceptions.....but I would not plan on it..........so if it's an assumable loan you want...you will need to ask the lender or broker upfront if it's assumable......and then you need to be able to qualify on your own.......so if the DTI is high now.......unless you are planning on seeing a major increase of your income.......(which i would assume is possible as you are still in scholl from the sounds of it) That will be what you are up against.......Just keep in mind the lender has the final say as to weather or not they will allow an assumption.....and the other thing to be aware of.......is that in certain states......MD as an example......the cost of removing someone from title can be several thousand dollars.....so it's something else you need to look into... and I guess my final point is.......that agreements.......are null and void once that paperwork is signed.......if you split up......there is nothing you can do with out his signature........sell or refi.......
If it takes 2 of you to qualify for the loan then both of you will be responcible for it. If for some reason you 2 split up you can continue paying on your own but with most mortgages out there today he will still be responcible for it legaly and mortgage will continue to reflect on his credit history. In order to recieve full ownership of the home you can agree to take him off the title but the mortgage will remain in both names untill sold, paid off or refinanced unless there is an assumption feature of the loan or the lender is willing to restructure th loan for you.
Hi Missmaria,
Welcome back.
Eugene has given you sound advice. If there is an assumption option, you can assume the mortgage and remove him from the title.
Now have you got the mortgage? If so how long have you got the mortgage? If you got it two years ago, then you may be able to refinance.
Feel free to ask if you have any further questions.
Best of luck,
Larry
Welcome back.
Eugene has given you sound advice. If there is an assumption option, you can assume the mortgage and remove him from the title.
Now have you got the mortgage? If so how long have you got the mortgage? If you got it two years ago, then you may be able to refinance.
Feel free to ask if you have any further questions.
Best of luck,
Larry
Most lenders do not do assumable loans anymore so that would be difficult to find and then you may have to pay a higher rate for that. You may be able to qualify for a no income verification loan but then the rate will be a little higher as well. I would go ahead and put the loan in both of your names since both of you will be responsible for the payment. If you break up, you could have an agreement that says that he is to walk away from the house with nothing due. He may allow you to make the payments even though he is still on the mortgage as long as they are made on time. It usually only becomes a problem if the person that is to pay the mortgage falls behind or the other person demands to be removed from the mortgage at time of separation. Worse case, you may have to refinance down the line but I think if you are pretty sure that you will be married, I would go ahead with the loan in both of your names. That is just my personal advice and what I would do if I were in your shoes.