My Perfect Mortgage
Name on Deed, Not Mortgage? A Practical Approach to Refinance
6 minute read
August 23, 2023

It’s possible to refinance a mortgage even if your name is not on the current mortgage. The more important question is whether or not your name is on the title of the property or not.

If a person is going to, say, take ownership of a house because of an inheritance, the main criteria they will be looking at is whether the title of the house is under their name.

The name on the previous mortgage is a much smaller consideration.

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How does the lender find out you have ownership of the home and the right to refinance?

When determining your ownership in a home and your right to refinance, lenders typically conduct several checks and evaluations.

Title search

Lenders will conduct a title search to verify your ownership of the property. This search also will reveal any liens, judgments, or any other encumbrances on the property that could affect your ability to refinance.

Equity assessment

Lenders will assess the equity you have in your home. If your home's value has decreased or if you have low equity, it may impact your ability to refinance with conventional lenders.

Credit check

Most refinance loans will require a credit check—reviewing your credit history and credit score in order to assess your creditworthiness and help determine the terms of the refinance loan.

Income and asset verification

Lenders will verify your income and assets to ensure that you have the financial means to repay the refinanced loan. This may involve providing documentation such as pay stubs, tax returns, and bank statements.

Debt-to-income ratio evaluation

Lenders will assess your debt-to-income ratio, which compares your debt payments to your monthly income per month. This helps lenders determine if you have the capacity to take on additional debt through the refinance.

Property appraisal

Lenders sometimes require a property appraisal to determine the current market value of your home. This appraisal helps determine the loan-to-value ratio, which is the ratio of the loan amount versus the appraised value of the property.

What documents do you need to prove ownership of the home?

When refinancing your mortgage, it's important to provide proof of homeownership.

Fortunately, the lender can usually use the title report and public county records to prove that you own the home, as well as any recent transfers and why they happened.

For instance, a relative quit-claimed the home to you at no cost, meaning they singed over ownership to you. The title would reflect that transfer.

You may need to supply other documentation relating to the refinance, like insurance coverage, a current mortgage statement, income, and asset documentation.

What if you just received the home as an inheritance?

The rules of inheriting a home are very similar to any other refinancing situation. If you have just received a home as an inheritance and want to refinance the mortgage, the first step is providing documentation of proof of ownership.

Consulting whoever was legally responsible for the settlement of the estate would probably give you the best insight on how to gain that documentation.

Debt statements, including:

  • Your latest mortgage statement for the property you are refinancing
  • Information on any other properties you own
  • Details of any outstanding home equity loans or lines of credit are required

To complete the refinancing process, it’s necessary to provide statements of debt.

This includes your latest mortgage statement for the property you are refinancing, along with any other properties you own. Additionally, any outstanding home equity loans or lines of credit should be accounted for.

What are my options for the mortgage when I inherit a home?

When it comes to refinancing a property you inherited, you have multiple choices—including continuing to adhere to the original mortgage terms, selling the house and keeping the proceeds, or refinancing the property with new terms.

If the home has a reverse mortgage, it’s crucial to inform the reverse mortgage servicer about the passing of your loved one and determine the outstanding balance on the reverse mortgage.

If you lack the funds to settle it outright, you could explore refinancing the property as a means to cover the balance.

Keep making the payments

Regardless of which way you decide to go, you must continue to make monthly mortgage payments while you decide on refinancing pathways for your inherited house.

Check your refinance options.

Multiple heirs: Can you refinance the loan into your own name?

Yes, it’s possible to refinance an inherited property into your own name. However, the process can be complicated, and it's important to understand the requirements and steps involved.

Get all heirs to agree

Obtaining a unanimous agreement from all heirs for the property's refinance is the first step. Even if they have no intention of assuming ownership, their consent to refinance can grant you sole proprietorship.

Calculate the value of the property

To determine the property's value and each individual's entitlement in a cash-out refinance, a thorough calculation is required.

The mortgage refinance must cover the outstanding mortgage and provide sufficient funds to compensate the other beneficiaries' portion of the property.

Provide documentation

To prove your ownership of the property, you'll need to provide documentation, including a registered deed with the legal owners' names and your title insurance, which also provides a legal description of your property.

Additionally—as with other refinancing options—meeting the lender's requirements for a new loan is necessary. This may involve a credit check, income verification, and other necessary documentation.

Refinancing an inherited home: Are there any waiting periods in this case?

The waiting period for refinancing an inherited home can vary depending on the lender you use and the loan type.

According to Fannie Mae, for a cash-out refinance, at least one borrower must have been on the property title for a minimum of six months before the new loan disbursement date.

However, there might be exceptions when the property was inherited or legally awarded, like in a divorce.

Typically, you have the flexibility to refinance a conventional loan whenever you prefer.

However, if you plan to refinance with the same lender, it may require a six-month waiting period. To clarify the specific refinancing requirements for an inherited property, it’s advisable to consult your lender directly.

By considering lender criteria and specific circumstances, you can navigate the refinancing process successfully.

Can you refinance the home you received in a divorce if you weren’t on the mortgage?

If you were awarded the marital home in a divorce but were not on the mortgage, you may still be able to refinance the loan into your own name.

Refinancing the current mortgage

If you want to keep the existing mortgage, you can refinance it into your name. This would involve working with the lender to transfer the mortgage into your name and assuming the responsibility for the loan.

Buying out your ex-spouse

Another option is to buy out your ex-spouse's share of the home and refinance the mortgage to remove their name from the loan. This would require determining the value of the home, negotiating a buyout amount, and refinancing the mortgage in your name.

Qualifying for the refinance

When refinancing, you will need to meet the lender's requirements, including demonstrating your ability to repay the loan based on your individual earnings, credit history, and savings.

Lenders will evaluate your financial situation to determine if you can handle the mortgage payments on your own.

Protecting your credit

Refinancing can help protect your credit by removing your ex-spouse's liability from the loan and lowering their debt-to-income ratio. This can make it easier for both parties to move forward financially after the divorce.

Can I refinance if my name is on the deed but not the mortgage—the bottom line

If you find yourself in a complex scenario, seeking guidance from a seasoned mortgage advisor is a wise move. Their expertise can illuminate the path forward, ensuring you make choices that secure your financial future.

Get started with your refinance.

Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.