Hello:
I have been married 6 years and purchased a house with my at that time fiancé. We are both on the mortgage and both on the deed as joint tenants. We have been married about 4 years. We are trying to re-fi to pay off some debt and maybe add on to our home.
The broker suggests re-financing the mortgage in MY name only and leave the deed in my name and my husband's. This would qualify us for a better loan and rate.
What are the positives and negatives of doing this? I am afraid to leave myself unprotected.

Hello s:

If you can find a bank that will do it, go ahead... But, most banks want BOTH owners on the note. That's because if the loan goes into foreclosure, the bank wants the WHOLE house, and doesn't want to argue with the other owner about it.

excon

excon, very often a bank will have only one spouse on the note (as long as their individual income qualifies them) and has both of them sign the mortgage. That way they have no problem proceeding with a foreclosure.

To the OP: The disadvantage for you is that you are the only one responsible for payment of the loan. If the loan goes into default and the two of you split up he is not responsible for paying back any of the balance of the loan that might be due after the sale of the house. Also, the amount of the loan hits only your credit, not his.

If you feel that those issues aren't a problem for you then there really aren't any major disadvantages. However there is something else to consider. Having a loan in both your names, and making full payments on time, will be a major factor in improving his credit. If the difference in the interest rate isn't that big then it might be to your advantage to keep him on the loan and improve his credit.

TO Lisa: that is where I am getting different information. I am told that if he is on the deed with me, which he is, then if we split up he still has to in some way pay for "his share" of house. Another answer is that like you said, I will be the only responsible party.

( My user name appears twice differently because I tried to re-register instead of logging in.


{Mod Note-Duplicate deleted}

The issue of whether he would have to pay "his share" of the loan would be something that would be resolved in a divorce. I don't have any experience with divorce law so I can't tell you if he would have to pay or not. But I know for sure that when the bank sues for the balance of the loan that may be due after a foreclosure the only person they're going to be suing is you and the judgment will be against only you.