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What is a Joint Mortgage?

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  • Written By: J. Beam
  • Edited By: Niki Foster
  • Last Modified Date: 26 August 2016
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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.

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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.

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anon308113
Post 6

Seven years ago my partner and I took on a joint mortgage and in that we also took on an unsecured loan. We have always met all repayments but my credit rating has been placed at 'fair' (despite me not even owning a credit card)because the mortgage and unsecured loan have only been put on my credit score and not my partners. All of the paperwork implies it was processed as a joint application. My partner's credit has obviously remained as good. Should I leave this or change, as obviously I don't want both of our scores o be reduced, but I feel a bit miffed that we have been refused a loan because of my credit rating!

anon58079
Post 5

I am separated and found out my ex took out a $2500.00 loan using the mortgage as collateral without my knowledge can he do that? Am I responsible even if I did not sign on loan or know nothing about it? He has forged my name in the past.

lomac1964
Post 4

I would like to know if you are applying for a joint mortgage does the significant other need to know his or her credit history? Example: if you have a credit card balance would this be openly discussed during the application?

SoWhat
Post 3

I have joint home ownership with a parent. I want to dissolve the ownership how do I do about that.

anon6060
Post 2

Probably not. The joint mortgage would be lopsided in that case, since the one spouse who is unemployed cannot contribute much to the mortgage payments. The "employed" spouse, whose credit was good enough for a sole mortgage, has opened the door for the other spouse.

When someone applies for a credit card, their credit bureau information is pulled, and their income is noted. If someone has mortgage debt (as a liability) and estate (as an asset), but with no income, the credit card company will calculate their debt ratio. His/her credit score *might* be improved based on the mortgage payments, but with no income, it doesn't seem likely.

However, the acceptance of a joint mortgage means that a joint credit card would be likely accepted as well. Sometimes the issuing bank (the mortgage holding bank) will "secure" the credit card based on having a mortgage. I would refer you to your personal banker. Good luck

anon2105
Post 1

The article says payment history applies on each indivual's credit history. If one spouse who is currently unemployed has no credit cards in their own name and they apply for one, would they be inclined to be accepted based on this mortgage payback?

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