Occasionally, two (or more) buyers will purchase a home together and secure a mortgage on the property, but only one of these buyers is named on the Note. The Note is the legally binding document, signed on settlement day, with a promise to repay the loan.
It’s possible for only one spouse or partner’s name to be on the note, even if both are listed on the home’s deed and mortgage. This can occur for any number of reasons, including one of the buyers/borrowers having a lesser credit score or significant debt. Sometimes it’s simply because one borrower can very easily qualify on their own.
As an example, Jane Smith and John Smith are husband and wife and decide to purchase their first home together. Let’s say that John Smith has considerable student loan debt – an amount that would make it hard for them to easily qualify for the type of home that Jane Smith could otherwise afford by herself. In this scenario, their trusted loan officer might carefully review their financials and determine that Jane can qualify for the home loan entirely on her own, without John’s income or personal assets. In this case, Jane and John purchase the home entirely together as a married couple (“tenants by the entireties”) but only Jane’s name is listed on the Note.
The two documents that are recorded in the county – the Deed and the Mortgage – must match exactly. Both Jane and John’s names would be included on both of these documents. The Note, however, may be different, and acceptable for the lender to only require Jane’s name and signature.
As a title insurance company, it is important for our team to be made aware of the exact names of all parties to be named on the deed and mortgage. Additionally, all buyers (even those not named on the note) must be in attendance on settlement day.
We encourage all of our clients to consult with a trusted accountant, loan officer, or attorney to determine their best options. If you have any questions about title insurance or county recording, please do not hesitate to contact us at (610) 584-6890 or titleservices@securityabstract.com