On Title But Not On Mortgage

Can Homeowners Be On Title But Not On Mortgage

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will cover and discuss homeowners on title but not on mortgage waiting period requirements after foreclosure. There are many cases where we get calls from home buyers who are married and can no longer afford their current homes. 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. In the following paragraphs, we will cover the waiting period requirements after foreclosure for borrowers on title but not on mortgage.

Waiting Period Requirements After Foreclosure To Qualify For a Mortgage

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 a mortgage after a 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 spouses is on the title but not on the 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 the title on a home that is being foreclosed on

Can The Title and Mortgage Be in Different Names?

This is an actual case scenario where a married couple was 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 only Mary Jones is on the mortgage loan  (note). Both Jim and Mary Jones are on the 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 is over 9 months behind on her mortgage.

Can Spouse Be On Title But Not on Mortgage and Qualify For a New Mortgage After Foreclosure?

Can Spouse Be On Title But Not on Mortgage and Qualify For a New Mortgage After Foreclosure?

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.

Waiting Period After Foreclosure For Spouse On Title But Not On Mortgage

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 the mandatory waiting period after foreclosure. As long as Jim Jones has a minimum of 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.

Refinance Mortgage With Only One Spouse On Mortgage

Prior Refinance

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

Will Spouse On Title But Not on Mortgage Be Able To Qualify For Mortgage After Foreclosure?

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 for a new home mortgage loan because of not being on the note

Home Buyers who need to qualify for a mortgage with a direct lender with no mortgage overlays on government and conventional loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.

This blog about the waiting period after foreclosure requirements for borrowers on title but not on mortgage was updated on July 13th, 2022