Generally, the only way to add another person’s name to any type of mortgage document is to refinance the loan. Some states use deeds of trust instead of mortgages to finance real estate transactions. In states in which you sign a deed of trust, also referred to as a mortgage, you are transferring the title to the property to a third-party trustee to hold as security until you pay off the loan in full. Lenders usually require that you add a co-borrower’s name to the property deed before refinancing the mortgage.
Use a quitclaim deed to transfer part ownership of the property to another individual. You can get a copy of the form from an office supply store or the county recorder's office. Some county clerk offices allow you to download the form online. The information a quitclaim deed form requires varies by county and state.
Complete each section of the form. Give the address of the property, including the county where it is located. Provide the property's legal description, which you can find on your mortgage or deed of trust document. You may also have to provide the parcel number, which you can find on your property tax bill. Include the date of transfer and the name of the person you're adding to the title and to whom you are transferring part ownership rights.
Sign the deed in the presence of a notary public. The next step is to record the deed in the county clerk's office in the county where the property is located. This makes it a matter of public record. The fee for recording a deed varies.
Check your credit. Any borrowers who sign the new mortgage contract must have a good credit history to qualify. Request your free annual credit reports from the nation’s three leading credit-reporting agencies: Experian, Equifax and TransUnion. Examine each for mistakes. Dispute any errors you find.
Shop for a lower interest rate before refinancing the loan. Crunch the numbers to determine what it will cost you to refinance as well as the benefits of taking out a shorter- or longer-term loan.
Apply for a refinance loan. Since you'll be creating a new contract with the lender, this gives you the opportunity to add a co-owner’s name to the mortgage. If you're approved for a loan, you and the co-borrower must sign a mortgage or deed of trust at closing, agreeing to the lender putting a lien on the property. The mortgage document also explains the lender’s legal rights if you default on the loan.
Provide documentation such as pay stubs and W-2 forms as proof of employment. Give the lender copies of your tax returns and a profit-loss statement for the past two or three years if you or the co-borrower is self-employed. Lenders look for stable income when determining your ability to repay the loan.
Use an online home value calculator to get a general idea of the value of your home. Divide the balance you still owe on your existing mortgage loan by the home’s appraised value to arrive at the loan-to-value ratio. For conventional loans, you need an LTV of 80 percent or less before a lender qualifies you and a co-borrower for a home refinance loan.
Sign the mortgage note, also known as the promissory note, at closing. The note states that you and the co-borrower named are responsible for repaying the mortgage loan. It outlines the terms of the loan and describes the actions the lender can take if you don’t make your loan payments on time.
Review and sign the mortgage contract or deed of trust at closing. While many borrowers think the mortgage contract is the loan, it’s a separate legal document you sign that puts up the property as collateral to secure the loan.
If you buy mortgage insurance or apply for a refinance loan through a special loan program such as FHA, VA or USDA, you can qualify with a lower down payment based on a loan-to-value above 80 percent.
- Realtor.com: What Is a Quitclaim Deed?
- Bank of America: What Happens at Closing?
- Bills.com: Will Adding My Name to a Mortgage Help My Credit Score?
- Nolo: What’s the Difference Between a Mortgage and Deed of Trust?
- American Bar Association. "Commercial Real Estate FAQs: What Is the Difference Between a Mortgage and a Deed of Trust?" Accessed July 31, 2020.
- Cornell Law School. "Deed of Trust." Accessed April 6, 2020.
- Consumer Financial Protection Bureau. "Deed of Trust." Accessed July 5, 2020.
- American Bar Association. "Glossary of Real Estate Terms: Deed of Trust." Accessed July 31, 2020.
- Consumer Financial Protection Bureau. "How Does Foreclosure Work?" Accessed July 5, 2020.
- American Bar Association. "Mortgage Note -- Deed of Trust Note." Accessed July 31, 2020.
- If you buy mortgage insurance or apply for a refinance loan through a special loan program such as FHA, VA or USDA, you can qualify with a lower down payment based on a loan-to-value above 80 percent.
Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.