A deed is the definitive instrument determining who owns a home. If your name is on it, you're the owner – or at least you own a portion of the property if someone else is named on the document with you. Mortgages and deeds don't deal with the same issues, and the names on each don't always match.
Your deed is the document that defines the property and transfers title between the individuals named in it. It typically includes lot and block numbers and a legal description of the land on which the home sits. It states who previously owned the house – the grantor – and the individuals that person is transferring the home to, called the grantees. If the names of both you and your brother appear on the deed as grantees, you're co-owners of the property. The mortgage doesn't affect this in any way.
Types of Ownership
Depending on the type of ownership the deed cites, you and your brother may not be equal owners of the home. If you took title as tenants in common, one of you may own 75 percent of the home and the other may own 25 percent. Ownership interests do not have to be legal with this type of deed. For example, if you and your brother bought the home together and he put down three-quarters of the down payment, he might be a 75 percent owner. You would have determined and agreed to this when you purchased the property. If you inherited the home from your parents subject to its mortgage and they gave it to both of you, you and your brother might be joint tenants. In this case, you would each have an equal share – 50 percent. The same applies if you purchased the property jointly and decided you'd each own half.
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Contrary to popular belief, a mortgage is not actually a loan. It's an agreement between a lender and a home buyer that gives the lender a security interest in the property. If the loan isn't repaid, the mortgage document gives the lender a legal right to foreclose. Who is actually responsible for making the mortgage payments has no bearing on the mortgage itself, but only on the note.
Unlike the mortgage, a note represents the loan itself. It's the promise made by your brother – or both of you – to pay back the loan proceeds. Without a corresponding mortgage, a note can be difficult, if not impossible, for a lender to collect on in the event of default. If the note to your property is in joint names, you and your brother both have a legal liability to pay the debt. If it's only in your brother's name, only he is legally liable for repayment – even though you own a portion of the home by virtue of the deed. Unfortunately for your brother, paying off the note does not give him full legal ownership.
- Womans Divorce: Divorce and Quitclaim Deeds
- Bankrate.com: Understanding Quitclaim, Warranty Deeds on Property
- Bankruptcy Law Network: You Signed the Mortgage But not the Note. So What?
- Law Offices of Howard M. Adelsberg: Types of Property Ownership
- Ohio State Bar Association: Before Foreclosure – What You Should Know
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