Why Both Spouses' Names Should Be on the Mortgage

If they're not and one dies, there could be complications

Linda, of Montgomery, Ala., encountered a problem when her husband died last November. The couple had purchased their home but Linda's husband had assumed an existing mortgage. The mistake he made was not adding Linda's name to the loan.

“I have been working unsuccessfully with Chase to find out the procedures I need to take to get the loan name changed to my name,” Linda wrote in a ConsumerAffairs post. “It has been the worst experience trying to get the professional assistance that I need to get this accomplished. I have been going in circles with customer service representatives at Chase, and I keep ending back at square one. It doesn't seem to matter that my name is on the deed to the house.”

It matters

Oh, but it does, although perhaps not in a good way. For starters, it's highly unusual for a lender to make a loan without the signatures of both parties on the deed. But since the loan was an assumption, that detail may have fallen through the cracks.

While Linda and her husband owned the house together, her husband was the only one who owed the bank for the loan, and now he is deceased. Where does that leave Linda?

Technically, Chase could call the loan since the person to whom it loaned money has died. Linda would have to come up with the cash or else refinance with Chase or another lender.

Ordinarily, that might not be a huge challenge. But with the collapse in home values, nothing is a given. If Linda were underwater on the loan, for example, she would not find a lender who would loan her the money. With today's much tougher lending standards, it's not a given that Linda can get another loan.

That's why couples should leave nothing to chance. When buying property together, make sure both parties are on the mortgage if both are listed on the deed.

It's also why wise consumers always consult an attorney when pondering a major financial transaction. What seems like a simple oversight can have far-reaching consequences.

Linda should seek legal help to get her situation straightened out instead of relying on Chase.  She is potentially making her predicament worse by trying to fix it herself.

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