Changing The Name On A Mortgage Note
When a homeowner is wanting to make a name change regarding their mortgage, he/she will need to be aware of a few things. The most common way to change a name on a mortgage is do a quit claim deed. When one does a quit claim deed he/she is changing the name on the deed of trust for a mortgage, not on the mortgage note itself. This does not mean he/she is changing the name on the loan note. When it comes to married couples at the time of purchase, they will both be on the deed of trust, but they may or may not both be on the loan note or the mortgage note. Usually, the person with the strongest credit will be on the mortgage note, but they might not have put the other spouse that has a weaker credit score on the loan note. This way they get the best possible mortgage rate on the mortgage loan at the time of application. The person(s) name(s) that is on the monthly mortgage statement is the person(s) that is on the mortgage note. That is the person(s) that is being reported to the credit bureau for making their mortgage payments on time, or for not making their payment.
When you perform a name change and go about it by doing a quit claim deed, be aware that you have not changed the name on the mortgage note, again, you have simply changed the name on the deed of trust. The original name(s) of the person(s) that signed up for the mortgage will still bear the responsibility of making the mortgage payments on time or suffer the credit recourse. Often, individually mistakenly think that by changing the name on the deed of trust will change the name on the mortgage note, and that is simply not the case. After a name change, you may pull a credit report to prove that point.
One can change the name on a mortgage note by refinancing the note into another person’s name, selling the property, filing the proper paper work if the homeowner passes away or if one of the homeowner passes, or if there is an executor of the estate of for the decease homeowner that is wanting to put the mortgage account into their name. A common time to see the confusion of name change is during a divorce. One spouse might have left the property and the mortgage note is in both their names. The spouse that left the property might think that because there is a divorce that their name is now off the loan note, and it isn’t. The spouse that is still residing on the property should be the more responsible one, because if that person is not, they will both suffer from bad credit reporting when both their names are on the account, and payments are being missed. It is not fair, but that’s simply the way it is. The best thing to do is to somehow convince the ex-spouse that is keeping the property to refinance the property into their name only, or outright sell the property. Or there may be a case where the ex-spouse that is residing on the property is not on the loan note, but was granted the o.k to stay on the property by the court; which puts the other spouse at jeopardy if that person decides not to pay or to become a habitual late payer at the other’s expense. It’s just a bad idea to leave an ex-spouse on the property and not get them to refinance the property into their name only, or sell it. I have personally seen many homeowners suffer at the expense of their ex-spouse for no good reason. There might be a case where the other person’s credit isn’t strong enough to do a refinance, in that case suggest that person be the one to move out; especially since the individual with the weak credit might be unlikely to maintain the mortgage payment which will affect the other person‘s credit in the long run. It is often a lot easier to rent a house or an apartment than to do a mortgage refinance, or to acquire a new home loan with weak credit.
I have seen too many couples that have divorced and the person who the mortgage note is not in their name continues to live on the property. That person living there may be aware that their credit is not being affected by their late mortgage payments and they take full advantage of the situation at the expense of an ex-spouse's credit. They pay late on a regular basis, they go in and out of foreclosure to the point of almost having the property go to sale; then they jump back in and make their payment to avoid the forelosure sale. They may continue with this kind of behavior for many years where they go months without making a single payment, and they keep track of the last date to do everything to save their property and save it just in time to still keep the property. They avoid the foreclosure sale and eviction by doing this and keeping good track of the property sale date. That is why I advocate getting the property sold or refinanced in the name of the person that is going to live there only. Or I strongly suggest trying to convince the other person to let you stay on the property instead, that way you do not have to depend on them to keep your credit clean after the relationship ends. It make good sense, you end up protecting your financial future by not allowing some careless person to destroy it. I see it all the time and it makes no sense.
