A joint mortgage is a home loan, secured by real property, given to more than one party based on their criteria together, rather than individually. Typically, this type of mortgage is issued to married couples, but it could also involve other partnerships, such as investors or friends who wish to purchase property together.
Often misunderstood, a joint mortgage is not the same as joint ownership. Ownership is determined by the deed, not the mortgage. A joint mortgage simply means that both applicants are responsible for repaying the loan. Couples often choose to apply for this type of mortgage in order to combine their incomes and qualify for a higher loan amount.
In a joint mortgage, each party is held equally financially liable for repayment of the loan and the payment history is applied to each party's credit history. While there are advantages to applying for such a mortgage because of combined income and credit scores, it is important to understand how the ownership of the property is deeded.
There are two common ways of recording a deed of joint ownership. Most married couples have joint survivorship, which means that if one person dies, sole ownership of the property automatically reverts to the survivor. In this case, all that is needed to prove ownership is the original joint survivorship deed and a copy of a recorded death certificate. Property deeded as joint tenants in common would apply to partners who wish to own the property equally, but not to deed their portion of ownership to the other should they die. In this case, should one owner die, their portion of ownership would revert to their survivor(s) through probate court.
Another common misconception regarding joint mortgages occurs when married couples divorce. Often, one spouse will quit-claim the deed to the other. This means that one spouse signs away any personal interest in the property and grants sole ownership to the other. However, if there is an outstanding mortgage balance on the property and the mortgage is a jointone, the couple remains equally financially responsible for repayment of the loan. Should either party fail to make payments, the other can be held responsible for repayment, even if they no longer have ownership rights to the property.
