That being said, when you purchase property or incur a debt in Texas, both you and your wife participate (unless separately held fund or properties are used). Everything you buy your wife owns equally. Every debt she incurs you owe equally. Thanks for Community Property. The exceptions are property held separately prior to marriage and maintained separately. Your attorney can explain this and how it applies to your particular circumstances.
It sounds like you don't need to add your wife, since she already has an undivided half interest in the property. Equally, when you sign a mortgage loan note, you are obligating her. The note mortgages (pledges) the property in full (not a partial interest) as collateral for the loan. The lender will require her as spouse to sign a Deed of Trust so that in case you default she cannot object to losing her half of the homestead. Her signing the Deed of Trust basically releases her homestead interest in the property in case of default. Yes, people can lie and say they're single when buying or selling, but then the omitted party's rights have not been extinguished. Be careful: lying is a bad thing to do.
Credit reports are somewhat more complex, however. Federal law tends to override state law in reporting of defaults etc. A credit report lists each debt according to the individual, regardless of community property, but when signing a mortgage note both husband and wife could and usually do sign. So, the credit report may show the debt as one of several codes or it may not show the wife on the debt. ECOA codes (about 10 of them) identify an account as belonging solely to an individual, a joint account, an authorized user, a co-maker and so on. Depending on how the mortgage note was originally coded it might appear as J for both or I for the husband only, but could be other codes. It would not be possible to predict accurately the effect on her credit for your default unless we know how the account is coded. If joint, she will show a default if you default, though.
As to having her on the deed, it is best to do so from the outset (at the time of your closing), not afterwards. Why waste the expense of a second deed? You also run the risk that the creditor decides to pursue you for conveying (an interest in) the property without paying off the debt. While most creditors will not pursue acceleration as long as the loan is paid on time, if there is a default, the creditor can accelerate the loan and demand immediate payment for that conveyance. By putting her in title at closing, the mortgage lender is aware from the outset that she has rights and she will have to sign the deed of trust, but there is no threat of acceleration for conveying an interest to her.
You really need to discuss this matter with your loan officer and Realtor before closing and consult an attorney to understand your rights and obligations better. Nicole's question is a valid one: what are you trying to accomplish?
1. Were you are will you be married at the time of purchase? As mentioned below Texas is a Community Property State and requires the spouse to sign the deed at closing (very few exceptions)
2. Are you trying to add a spouse to a property already purchased prior to the marriage? Really easy - "Warranty Deed" - any local title company can help you for about $50.
3. Are you trying to remove a spouse from a property already purchaed together? 2 scenerios here: If the property is free and clear one spouse can give up rights with a "quit claim deed". If there is a loan against the property, in which both spouses are on the loan; only a refinance or sale can remove someone from the deed.
I hope this helps and please make sure your working with a professional, the market is not normal.
ROB SPRING, MBA
The reason I ask is a quit claim is really only good for certain scenarios. As to her legal obligations - there is not enough information to comment on with that one, sorry. As to a default, yes defaults can hurt your credit if the bank reports it. If the mortgage is in both of your names, then it will likely default onto both of your credit reports. (I say likely because there is always the off chance the lender does not report, but that is usually the case that they DO report it onto your credit.) Texas is a community property state, so there could be other legal obligations as to taxes and mortgage payments and the Quit Claim deed your talking about that could affect you legally, and for that you' d have to seek legal counsel. Are you trying to avoid a foreclosure and signing the property over to someone else?
If you need help, I'd be happy to help ya, most people don't realize the bank pays our commissions on short sales (pre-foreclosures).
Nicole Arenas, Realtor
Go to any title company and you can add her name for about $75 in most cases and do it the right way.
You can do it after closing if you want. Her name does not have to be on the deed for her to have an interest in the property. You will also want to check with your lender about changing names on the deed. They may want her name on the loan if you add her to the deed. Having her name on the deed at closing will save you money if you are going to add her anyway.
If you are married in Texas I understand your legal and credit are tied to each other unless you specifically set up things intentionally to be separate (and you probably need an attorney to do this.) It is almost as though you are one person in many ways.
a) Any party listed on deed is held responsible for real estate taxes
b) If you have a mortgage it might require lender approval contact your mortgage company
c) If you default on loan you are on mortgage her name is not listed however tax, insurance is also involved.
d) All changes in title require you go thru a title company contact their office determine cost make all document changes.
National Featured Realtor and Consultant, Mortgage Loan Officer, Lecturer regarding Credit Repair