Can You Charge the Title Name on a Mortgage Loan?

Changing the title name on a mortgage loan is a process that many homeowners consider for various reasons. It often comes up in situations like marriage, divorce, inheritance, or co-ownership adjustments. However, this process is not as simple as changing a name on a personal document. It involves legal steps, lender approval, and financial considerations.

Understanding how mortgage titles and loans work can help avoid legal and financial troubles. This guide will explain the key aspects of changing a title name on a mortgage loan, including requirements, challenges, and best practices.

Key Points:

1. A mortgage loan and a title are separate legal documents.
2. Lender approval is often required to change the title name.
3. Refinancing may be necessary in some cases.

What Is the Difference Between a Mortgage and a Title?

A mortgage and a title are not the same things, although they are closely related.

A title represents ownership of a property. The person whose name is on the title is the legal owner of the home. This is recorded in public records.

A mortgage is a loan used to buy a property. It is an agreement between the borrower and a lender. The lender provides funds to purchase the home, and the borrower agrees to repay the loan over time.

Comparison of Mortgage and Title

A homeowner may be on the title but not on the mortgage, and vice versa. This is why changing a title name on a mortgage loan is a complex process.

Why Would Someone Want to Change the Title Name?

There are several common reasons why homeowners need to change the title name on a mortgage loan:

• Marriage – Adding a spouse to the title after getting married.
• Divorce – Removing a spouse from the title after separation.
• Inheritance – Transferring property to an heir after the owner’s death.
• Joint Ownership – Adding or removing a co-owner.
• Trust Transfer – Moving a property into a family trust for estate planning.

Each of these cases has different legal and financial implications.

Do You Need Lender Approval to Change the Title?

Yes, lender approval is often required before changing the title name on a mortgage loan. Mortgage lenders have a financial interest in the property. Any change in ownership could affect the security of their loan.

A lender may require:

• A new credit check on the person being added.
• Proof of financial ability to make payments.
• Refinancing if the ownership change affects loan terms.

In some cases, a quitclaim deed can be used to transfer ownership without affecting the mortgage, but this does not remove financial responsibility from the original borrower.

How to Change the Title Name Without Refinancing?

If refinancing is not an option, the process of changing the title name may include:

1. Check with the lender – Some lenders allow minor title changes without requiring refinancing.
2. Prepare legal documents – A quitclaim deed or warranty deed is often needed.
3. Sign and notarize the documents – Both parties (current and new owners) must sign.
4. File the deed with the county recorder – This ensures the change is legally recognized.
5. Update insurance and tax records – The new titleholder must be listed on these documents.

Changing the title without refinancing is easier in cases of inheritance or gifting a property.

Does Changing the Title Affect Mortgage Payments?

Yes, title changes can impact mortgage payments in certain cases. If a co-borrower is removed from the title and they were contributing to payments, the remaining borrower must cover the full amount.

If the lender requires refinancing, the new loan terms could lead to:

• A higher interest rate if market rates have increased.
• New loan fees due to processing and legal costs.
• Credit checks that affect loan approval.

Homeowners should consider how a title change might impact their financial situation.

What Happens If Someone’s Name Is on the Title but Not the Mortgage?

It is possible for someone to be listed on the title but not on the mortgage. This means they have legal ownership rights but are not responsible for repaying the loan.

However, if the mortgage holder stops making payments, the lender can still foreclose on the home, even if the titleholder is not financially responsible.

Comparison of Titleholder vs. Mortgage Holder

In some cases, having different names on the title and mortgage is a strategic decision, such as for estate planning.

What Legal Documents Are Needed to Change the Title?

The documents required to change a title name on a mortgage loan include:

1. Quitclaim Deed – Used for transferring property ownership between family members.
2. Warranty Deed – Provides legal protection for the new owner.
3. Grant Deed – Confirms transfer with warranties of ownership.
4. Title Insurance Policy – Ensures the new title is legally valid.

These documents must be properly signed and recorded with the county.

What Are the Costs Involved in Changing the Title?

Title changes involve various costs, including:

• Recording fees ($50–$300 depending on the county).
• Attorney fees ($500–$2,000 if legal advice is needed).
• Lender fees (if approval is required).

Homeowners should check local laws and lender policies before proceeding.

Conclusion

Changing the title name on a mortgage loan is a complex process that involves legal and financial considerations. While it is possible to make changes, lender approval and proper documentation are often required. In some cases, refinancing may be necessary. Homeowners should carefully evaluate their situation and consult with professionals before proceeding.

FAQs

1. Can you remove someone from a title without their consent?
 No, both parties must agree unless a court order is involved.

2. Can a mortgage exist without a title?
 No, a mortgage is always tied to a property title.

3. What happens if I add someone to my title?
 They gain ownership rights but may not be responsible for loan payments.

4. Does changing the title affect property taxes?
 It may, depending on state laws and the type of ownership transfer.

5. Can I change the title name on a mortgage loan without an attorney?
 It is possible, but legal guidance is recommended for accuracy.

Note: Always consult with a financial advisor before making title changes.
 Note: Laws may vary by state, so check local regulations.