Q: My wife is on the title but not on the mortgage. If I miss a payment or default on a loan is her credit affected the same? Can I remove her name from the title and how would I go about doing that? I don’t want to take the chance of ruining her credit. Thanks.
A: If she is not on the mortgage, whether you pay on time, sporadically or not at all should not be reported to her social security number.
You shouldn’t have to take her off the title, but pull a copy of her credit history just to be sure she’s not listed somehow on the mortgage. Your wife can get a free copy of her credit history from each of the three major credit reporting bureaus by going to www.AnnualCreditReport.com. She may be offered the ability to obtain her credit score for about $8 but she does not need to do that to get the reports.
There are times that lenders will allow a borrower to buy a home and use only the credit history and credit score of that buyer to grant the loan. Yet, at the same time the lender will allow a spouse to be on title but not on the loan to the home.
When lenders proceed along these lines, the spouse is on title and on the mortgage, but the spouse does not sign the promise to repay money to the lender. In this manner the spouse doesn’t have the legal obligation to repay the money owed on the loan, but has an ownership right to the home.
If your wife is on title, but isn’t on the mortgage, you might have added her name to the title to the home sometime after you obtained the loan for the home. In either case, your wife shouldn’t be responsible for any late payments on the loan and her credit shouldn’t be affected if you miss a payment.
Try not to miss a payment and try to keep your credit history in good shape and your credit score as high as possible. You too can check out your credit history by going to www.AnnualCreditReport.com.