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If you add a person to your home's deed can that person refinance the home for you?

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August 25, 2012 2:29PM

If your credit record is too poor or your income inadequate to refinance on your own you could add a co-owner to the property who has good credit and who can qualify for a mortgage. In this scenario, your co-owner would become an equal owner of the property and would be fully responsible for paying the mortgage. Before you act you should discuss the issue with an attorney who can explain the consequences and draft a deed appropriate for your jurisdiction.

A reputable lender knows it must have a full interest in the property in case of a default. Therefore ALL the owners must join in the mortgage. If only one owner signs the mortgage and then defaults, the lender can only acquire their half interest by a foreclosure. A half interest is hard to value, and sell even in a good real estate market. Many inexperienced "lenders" granted mortgages on proportionate interest in some areas during the real estate boom simply by mistake and sometimes just to add another mortgage to the bundle. Many of the sloppy practices that were abundant during the sub-prime boom no longer take place.

You shouldn't plan on a new co-owner being able to finance the property without your signature.