Mortgage Guidelines When Homeowner Is On Title But Not On Mortgage


This BLOG On Mortgage Guidelines When Homeowner Is On Title But Not On Mortgage Was UPDATED And PUBLISHED On November 15th, 2019

On Title But Not On Mortgage
Gustan Cho Associates

There are many cases where we get calls from home buyers where they are married and can no longer afford their current home. Their current home payments are in arrears. These homeowners normally have home values that are lower than the balance of their mortgage loan and are often facing foreclosure.

  • They want to know if there are any options for them in giving up their current home
  • Homeowners can contact their lenders and see if they have options to avoid standard foreclosure
  • Many lenders will offer mortgage after deed in lieu of foreclosure, or short sale
  • The only way they can qualify for a residential mortgage loan in situations like these is if one of the spouse is on title but not on mortgage
  • A homeowner can be on title to the home but not on the note
  • The spouse that is not on the note can qualify for a new mortgage loan even though they are on title on a home that is being foreclosed on

In this article, we will cover and discuss where homeowner is on title but not on the mortgage.

Case Scenario Where Homeowner On Title But Not On Mortgage

Case Scenario Where Homeowner On Title But Not On Mortgage

This is an actual case scenario where a married couple were able to purchase another home while their current home was under foreclosure.

  • Say Jim and Mary Jones currently have a $400,000 home that is under foreclosure
  • But the only Mary Jones is on the mortgage loan ( note ) 
  • Both Jim and Mary Jones are on title
  • They could no longer afford the home due to Mary Jones being out of work for over a year
  • She now got a job but are over 9 months behind on her mortgage
  • When they purchased the home five years ago, Jim Jones was a full-time student so he did not go on the mortgage loan
  • The mortgage loan borrower was just Mary Jones
  • Jim Jones was on title together with Mary Jones
  • Since they have small children and pets, renting an apartment is not an option
  • Home rentals are more than what a home mortgage would be so they want to purchase a $200,000 home
  • Jim Jones has fair credit and makes $40,000 per year
  • On this particular scenario, Jim Jones will qualify for a new home mortgage loan but not Mary Jones
  • Mary Jones’s income cannot be used nor can she be on the loan due to not meeting mandatory waiting period after foreclosure
  • As long as Jim Jones has a minimum 580 credit scores
  • His income and liabilities are in line to meet the minimum debt to income ratio requirements
  • Jim Jones can qualify for a new home purchase FHA Loan

Mary Jones cannot go on the loan but can go on title to the home.

Prior Refinance

On Title But Not On Mortgage: Prior Refinance

If both husband and wife were on title and on the mortgage before but the spouse refinanced name out of the note at some time ago and just had the the other spouse on the note, they are eligible to a new home mortgage loan even if the house they are living in is in foreclosure. This is not considered a bail.

  • As long as new borrower is not on the note, they are fine
  • However, if refinanced out with the intention of deceiving or planning on foreclosing on the home, then it is a definite no go
  • However, if you were all good with your spouse making the monthly mortgage payments timely for a period of time but somehow things went wrong and the home went into foreclosure, you can qualify on a new home mortgage loan because of not being on the note

Home Buyers who need to qualify for mortgage with a direct lender with no mortgage overlays on government and conventional loans, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at We are available 7 days a week, evenings, weekends, and holidays.

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