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Adding wife's name onto title and opening a HELOC
Old 04-21-2010, 04:34 PM   #1
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Adding wife's name onto title and opening a HELOC

Hello,

I've been meaning add DW to the title of the house for a while and I'm finally getting around to it. I bought the house before we got married.

I'm also getting ready to open up an HELOC. I casually mentioned this to PenFed and they said that I should probably add her to title first before applying for the HELOC. She couldn't explain why though! I thought that it maybe because the rep thought that DW should also be responsible for any balance on the HELOC. Can anyone think of a more valid reason?

If there is a valid reason, does that mean that I need to notify my first mortgage lender (also PenFed) if my title changes to add my wife?

Thanks.
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Old 04-21-2010, 04:57 PM   #2
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Originally Posted by WanderALot View Post
Hello,

I've been meaning add DW to the title of the house for a while and I'm finally getting around to it. I bought the house before we got married.

I'm also getting ready to open up an HELOC. I casually mentioned this to PenFed and they said that I should probably add her to title first before applying for the HELOC. She couldn't explain why though! I thought that it maybe because the rep thought that DW should also be responsible for any balance on the HELOC. Can anyone think of a more valid reason?

If there is a valid reason, does that mean that I need to notify my first mortgage lender (also PenFed) if my title changes to add my wife?

Thanks.

Doesn't work that way. Technically, the mortgage holder holds the title, not you, until the loan is satisfied in full, and they do a release of title .

Call your primary mortgage lender and they will most likely tell you that you will have to re-fi jointly to add her to the title docs. The original mortgage note is a contract that was executed between you and the mortgage holder, adding your wife after the fact isn't possible since she wasn't a party to that transaction and didn't sign any of the original paperwork binding her to that mortgage.

We did open a HELOC in both our names on a house I owned before we were married- but we couldn't just "add her" to the original note. The HELOC is considered a new separate contract, secured (in second position) by real property. Probably didn't matter to them if she had an ownership intererest in it or not, as long as I was willing to put my equity in it up for collateral..

Been there, done that...
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Old 04-21-2010, 05:02 PM   #3
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Doesn't work that way.
Call your primary mortgage lender and they will most likely tell you that you will have to re-fi jointly to add a second party to an existing note. The note is a contract that was executed between you and the mortgage holder, adding your wife after the fact would be modifying the contract.
I'm not trying to add DW's name to the first, I'm just trying to add her name onto the deed of the house. The first (and also the prospective HELOC) will continue to be in my name only.
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Old 04-21-2010, 05:10 PM   #4
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I'm not trying to add DW's name to the first, I'm just trying to add her name onto the deed of the house. The first (and also the prospective HELOC) will continue to be in my name only.
In order to add her name to the deed, you willl have to give up (half?) interest in the property- interest that you don't have free and clear to proscribe to a third party, since it is encumbered by your mortgage.
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Old 04-21-2010, 05:18 PM   #5
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In order to add her name to the deed, you willl have to give up (half?) interest in the property- interest that you don't have free and clear to proscribe to a third party, since it is encumbered by your mortgage.
Ok, I can see that. But that wasn't was the PenFed gal said, she was talking about opening a HELOC. She said I didn't mention anything have to with my first. How is this enforced anyways? It seems like anyone can just go to their county recorder's office and add someone to their deed without letting their lender know.

So what do people do in this situation? Do they either refi and then add their wife's name on it or wait till they are mortgage free? It's seems like this would be a fairly common scenario.
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Old 04-21-2010, 05:21 PM   #6
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What is the purpose of adding her to the deed? I mean it's just a piece of paper. Aren't there legal costs (probably minor, but still)?
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Old 04-21-2010, 05:26 PM   #7
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We changed our title from DW and I to a revocable trust without a problem. We had a mortgage and didn't hear any complaints. Just an estate planning thing. Except when we tried to get a HELOC, they wouldn't lend us any money without the names being identical on the HELOC and the house. We ended up retitling back to the way it was.

Different beast, but I guess you just have to figure out what the game is and play it that way.
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Old 04-21-2010, 05:27 PM   #8
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In order to add her name to the deed, you willl have to give up (half?) interest in the property- interest that you don't have free and clear to proscribe to a third party, since it is encumbered by your mortgage.
Either your state is different... or you are messing up on what I think he wants to do...

The mortgage company does not have title to the house.. the purchaser of the house has title... the mortgage company has a lien due to the loan it wants to be repaid. When it is repaid, they issue a release of lien, not anything to do with the title.

If you want to change title, you do have to see if there is a limitation in your loan agreement. Some might have some language on it that you might have to get approval on to do it... but from what I saw it was not a problem to add someone to the title..

Also, your wife might have some claim to the house. I am selling mine and was told she has to sign... I said 'it is mine... separate property'... I was told (well, this is how I phrase it)... "go blow sand... we don't care... we want to cover our a$$... we don't care if you have a prenup... we don't care what you do... we will not close if she does not sign"....
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Old 04-21-2010, 05:42 PM   #9
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What is the purpose of adding her to the deed? I mean it's just a piece of paper. Aren't there legal costs (probably minor, but still)?
Well, its the beginning of my estate planning. Since the house is titled as "sole and separate property", I wanted to clean things up for DW in case something happened to me. We are in CA, which is a community property state, but since the house was acquired before we got married, I didn't want there to be any hassles.

Quote:
The mortgage company does not have title to the house.. the purchaser of the house has title... the mortgage company has a lien due to the loan it wants to be repaid. When it is repaid, they issue a release of lien, not anything to do with the title.

If you want to change title, you do have to see if there is a limitation in your loan agreement. Some might have some language on it that you might have to get approval on to do it... but from what I saw it was not a problem to add someone to the title..
Ahh OK, this would explain why people don't have to resort to a refi or paying off the loan before adding their spouse. I did check my loan docs and didn't see any reporting requirements or limitations there.

Quote:
Also, your wife might have some claim to the house. I am selling mine and was told she has to sign... I said 'it is mine... separate property'... I was told (well, this is how I phrase it)... "go blow sand... we don't care... we want to cover our a$$... we don't care if you have a prenup... we don't care what you do... we will not close if she does not sign"....
Yeah, this might be the case in CA. The first time I refi'd was right after we got married and they made DW sign a Quit Claim before closing. I guess this is another question that I'll have when we finally meet with an estate attorney!

Thanks!
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Old 04-21-2010, 06:31 PM   #10
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I guess each state may be different - but in my state when I did exactly what you are proposing, I got a letter from the state Department of revenue and a bill for real-estate excise tax. They viewed this as a gift and we had to jump though hoops to prove that we were married (and there was no gift) including sending a letter, certified copy of marriage cert and other docs. We have been married for many years and refiid a couple of times in that period with both our names on the mortgage but there was an error when the deed was recorded years ago and only my name was on it. The last time we chased dropping interest rates the title company caught the error and changed the paperwork. No one gave it a second thought until we got an audit letter.

When our error was discovered the title co atty suggested that if I died and my husband had tried to sell for some reason, he would have run into trouble if this were not corrected.
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Old 04-22-2010, 12:58 AM   #11
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I'm also getting ready to open up an HELOC. I casually mentioned this to PenFed and they said that I should probably add her to title first before applying for the HELOC. She couldn't explain why though! I thought that it maybe because the rep thought that DW should also be responsible for any balance on the HELOC. Can anyone think of a more valid reason?
When spouse and I bought our current house (in our 15th year of marriage) we titled it in just her name.

When we did our latest of several refinances, the mortgage company balked at lending money to anyone whose name wasn't on the title. Their position was that I couldn't borrow money without collateral, and I didn't own the collateral that I wanted to borrow money on. Our choices were to retitle the house or to use only her income (and only half our assets) on the application... and of course have only her name on the mortgage note.

Maybe we had the only applications processor in the last decade to actually read our application, or maybe today's FHA lending standards are tighter. But that's what had to happen before we could get our hands on their money.

BTW, having the house in her name was originally a good idea (for family/relatives reasons) but in execution it turned out to be a PITA. Our neighborhood homeowner's association would not speak to me because my name was not on the title. My membership "admission" card to the local recreation center had to be applied for by her. I was "allowed" to enter the rec center without her escort, but I couldn't take our kid to the rec center without spouse because I wasn't a "member". I couldn't attend HOA meetings, let alone vote. I couldn't sign us up for utilities because my name wasn't on the title, and then I couldn't prove residency because my name wasn't on the utility bills. We even got a state query one year because I was paying property tax from my checking account on property I didn't own. Apparently that's only done by mobsters or terrorists.

Here's another money story. When PenFed sent us our HELOC paperwork, we trotted off to the notary's office and the notary notarized it. Seems pretty straightforward, right? They do it thousands of times a year and probably know what they're doing. However PenFed bounced it right back because we hadn't had it notarized IAW PenFed's instructions. The notary balked because it wasn't IAW Hawaii state law (or whatever rules apply to notaries) but I finally jawboned her into writing all the extra stuff onto the form that PenFed felt was absolutely essential to the integrity of the process. I don't remember the precise verbiage that caused all the heartburn but I remember saying several times "Look, I'm not a notary but I know how to follow instructions, and these are their instructions."

So if your notary says "Aw, that stuff's not necessary", they may be right. But that doesn't mean that PenFed can live without it.
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Old 04-22-2010, 04:44 AM   #12
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I am about to to change the deed on our house from my wife's name to both names in "joint tenancy with rights of survivorship". Doing this to avoid any probate hassles if one of us dies. This will have no bearing on our mortgage. In SC it is better to do a warranty deed then a quitclaim to avoid any possible issues with the title ins. co if we sold. We also have a HELOC with the same bank we have the mortgage. It is relaltively simple and we are doing it ourselves.
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Old 04-22-2010, 05:28 AM   #13
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Wander,

I dont know about other states, but in Illinois all you would have to do is execute a quit-claim deed from yourself to you and your wife in "joint tenancy with rights of survivorship". This grants whatever interest you have in the property to you and your wife, and does avoid issues when either the husband or wife dies. This also makes your wife also responsible for any liens, mortgage, etc against the property.

You should tell your 1st mortgage lender what you're doing and get them a copy of the deed. They may want to amend the mortgage to include your wife
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Old 04-22-2010, 06:14 AM   #14
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What is the purpose of adding her to the deed? I mean it's just a piece of paper. Aren't there legal costs (probably minor, but still)?
I did the same thing (bought the house before we were married) and later added her to the title during a refinance done to get a lower interest rate.

There were two incentives to add her to the title. One was to eliminate estate issues if I bought the farm - the house would go straight to her. The other was that it adds a layer of protection for the equity in the house if I was sued for actions at work. It's a lot harder to attach jointly-owned property if half of the property owners had nothing to do with events leading up to the suit.
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Old 04-22-2010, 08:51 AM   #15
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BTW, having the house in her name was originally a good idea (for family/relatives reasons) but in execution it turned out to be a PITA. Our neighborhood homeowner's association would not speak to me because my name was not on the title. My membership "admission" card to the local recreation center had to be applied for by her. I was "allowed" to enter the rec center without her escort, but I couldn't take our kid to the rec center without spouse because I wasn't a "member". I couldn't attend HOA meetings, let alone vote.
Wow, that absolutely crazy. These outfits can be a complete PITA.

By the way, DW and I did the exact opposite of all this. Our two houses were joint but we split the titles up (primary to her, weekend place to me) as part of estate planning. When one of us dies our assets go into a family trust that the other controls.
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Old 04-22-2010, 11:28 PM   #16
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By the way, DW and I did the exact opposite of all this. Our two houses were joint but we split the titles up (primary to her, weekend place to me) as part of estate planning. When one of us dies our assets go into a family trust that the other controls.
We were heading in that direction... and then suddenly her parents ended up being our rental property's tenants for over five years.

We'll get back on track one day, but I'm not going to start a bunch of trust paperwork until we figure out what the heck it is we're trying to do. Currently the plan is to keep the rental "forever" since it's a single-story floorplan better for aging in place.
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