If you use a co-signer for a mortgage do they then have to be listed on the deed as well?

Question

Looking to purchase a home and I don't think that I will qualify for a mortgage on my own. So, thinking about adding on a co-signer who will most likely be one or both of my parents. Do they then have to be listed on the deed as an owner of the property as well? The plan would be then after a year or two to 'buy' them out. Would there have to be an exchange of money to do that? Or could I simply re-finance the loan into my name only and have them removed from the deed at the same time? Looking for ways on how this is done with joint ownership.

Not sure if it matters but I live in Maryland in case someone knows specific laws in that state.

Answer 1

No

This situation is very common, in fact I bought my first house the same way. Your parents do not have to be on title but I still recommend that they be included. When you can refinance in your name alone, the parents would simply have to sign a quit claim deed relinquishing their rights to the property..

Answer 2

I think it is going to depend more on the lender and the co-borrower than the law. Taking on the obligation of paying the debt, but not having no legal interest in the asset, is something only a a family member is likely to do. It can save you some transfer fees, like recording fee and transfer taxes if the co-signer is not on the deed. It also avoids the implication that they are making a gift to you when they go off the deed. Gift taxes apply in some situations, although there is a very large lifetime exemption.No, you won't have to exchange any money to get them off the deed. You can probably just use a quit-claim deed, but there might be an implication of a gift of their interest in the property as it is stated on the deed. This is all rather general and I recommend that you consult your legal and tax advisers before taking title.

Answer 3

They will be put on the deed and even if you are able to get them removed at a future date, they will still be obligated to the loan. The only way for a co-signers obligation to be removed is if the loan is repaid in full or if the lender agrees to take the co-signer off. The latter is very unlikely, so don’t expect it to happen under any circumstances.

Given that you can use their credit to help establish yours, after a few years attempt a refinance or even sell the property and buy something yourself.

Advice:

1) Proceed with reasonable prudence, consult an attorney and accept the fact that cosigning is a act of generosity that puts the onus on you to accept full financial and emotional responsibility if something goes wrong.

2) Structure this as a business deal that if something goes wrong your risk and potential exposure is preserved in the form of equity and future control. This can be done in numerous ways with the help of an attorney. I would strongly encourage you to pursue the latter as it treats both you and your parents as responsible parties and separates some of the potential emotional entanglements. If they feel uncomfortable with the your (and the lawyers) recommendation it should raise red flags for you--you should not be the one putting themselves at risk with out an equal opportunity for reward, prudent business practices are often the best route for maintaining the strength and love in family relationships--neither you nor they can predict the future.

Answer 4

The is no such thing as a co-signer for a mortgage!!!!!!!!!!!
You are not buying a car. They would be a co-borrower and co-owner and they would be on the note and the deed. You will not be able to buy them out unless you refi under your own new loan.

Answer 5

You are not required to list them as owners on the deed, if they co-sign a mortgage for you. However, it makes sense to list them for their own protection. You are asking them to guarantee your ability to pay with no ownership should you default.

When you 'buy them out' down the road, you will be required to re-finance in your name only, since no lender will remove them as guarantors without a refinance. At that time, you can also remove them from the deed as owners.

Answer 6

No. "Buying them out would mean you would have to refinance.

I have had mortgages with co signers and only my name was on the deed.

They could be on the deed then issue another deed only to you..Cost about forty bucks

Answer 7

I'm not sure how you plan to "buy them out" but if they cosign your loan, they are liable for it until it is paid off in full. A private arrangement between you and them will not relieve them of that liability.

Answer 8

co-signer is usually only resposible if you cant make payments.

Answer 9

This is good