Mortgages are loans made by financial institutions to particular borrowers, so changing the name frequently entails more than merely notifying the lender. When the same borrower changes their name as a result of marriage or divorce, the procedure is streamlined. However, it is more difficult to add or remove borrowers. Changes that change the parties responsible for loan repayment require approval from the mortgage company.
Tip
Change your name on your driver’s license and Social Security card first if you have a legal name change as a result of marriage, divorce, or another legal procedure. Afterward, provide copies of the new identity and the official document changing your name to your mortgage business.
The first thing to do
There are a few additional places you must change your name before changing names on the mortgage, whether you’ve gotten divorced and are going back to the name that was on your birth certificate or accepting a spousal name after marriage. Update your passport, Social Security card, driver’s license, and other official identifying documents. This will make it simpler for you to inform your lender, as it will need to show identification in your new name in addition to the court-issued name change order.
Including or Removing a Borrower
If the names on your mortgage change, you normally need to refinance your loan. The death of one of the specified borrowers is an exception to the rule against removing names from mortgages. In order to remove their name from the mortgage, the lender will want you to complete a form and submit a certified copy of the death certificate.
In some cases, even if you weren’t the original borrower, you can still add your name to a mortgage. For instance, if you’re divorcing and get the marital home as part of the settlement, if you put the house in a trust, or if a parent or spouse somehow gave the house to you. This is referred to as a successor in interest and calls for completing a form with your lender, presenting legal proof of the change (like a deed), and submitting an affidavit verifying your identification that has been notarized.
Assumption-Based Name Change
Assumable mortgages are another another opportunity to change names on a mortgage, albeit being less popular than they were 20 years ago. As long as the new borrower is eligible to assume the former borrower’s mortgage, Department of Veterans Affairs, Federal Housing Administration, and United States Department of Agriculture loans can be assumed without closing expenses and appraisal fees. An assumption fee is due from the borrower to the lender. The drawback to this, though, is having to figure out how to make up the difference between the amount of the assumption and the home’s sales price. For instance, the average home sold for $1.6 million in San Francisco in 2018, yet the maximum VA loan amount was $726,525. Therefore, in order to reach the sales price you and the seller agreed upon, you might still have to pay hundreds of thousands of dollars out of pocket or finance the difference with a second mortgage.
Same individual, different name
Step 1 If your name has changed from how it appears on the mortgage, get a copy of your marriage certificate or divorce order.
Step 2: Call the mortgage provider and ask how to rename the loan in your new name.
Step 3: Fill out the paperwork in the name change kit the mortgage lender sent, or, if permitted, go in person to the mortgage lender’s local office to sign the paperwork.
Fresh Person
Step 1: Call the mortgage lender’s customer service line and give your new name’s justification. If you need to change the names on the mortgage, be prepared to apply for a new mortgage.
Step 2 Speak with a title business or a real estate lawyer to request that the formalities necessary to transfer ownership of the property to the person you want to be listed as the mortgagee be carried out.
Step 3 Talk to a mortgage broker about your circumstances so they can assist you in applying for a new mortgage to replace the old one. You might be required to pay a down payment that lowers the size of the new mortgage. This is dependent on the property’s valuation and the new mortgage holder’s creditworthiness.
Step 4: Identify the title firm or lawyer handling the property transfer to the mortgage lender who approves a loan in the name of the new borrower. Documents will be exchanged between those parties for either a new mortgage or an assumption of the existing mortgage into the name of the new borrower.
