What You Need to Know Before Closing

If you are refinancing or buying a new home, your spouse may have to be involved even if you are the only person on the mortgage.

Depending on what state you live in, your spouse may have to sign the legal documents at closing, even if they are not on the loan.

Spousal States

If you are a married homeowner in a Spousal State, your spouse has to sign certain documents to attest that he or she knows about the new loan.

Typically, the spouse will need to sign the Deed of Trust, the Right to Cancel, the Truth-In-Lending (TIL), and various title and settlement documents.

Your spouse is not financially responsible for the mortgage by signing these documents as long as they are not on the note (the note is the legal-binding document that defines the terms of the loan and who is responsible). They are simply acknowledging that a new mortgage is being taken out against the property.

It's also important to mention that anyone on the deed to your home must sign the spousal documents, whether or not you live in a spousal state. All owners of the home must acknowledge that you are borrowing money against the home.

Community Property States

In Community Property States, not only does your spouse have to sign the legal docs, but they are also financially responsible for the mortgage regardless of whether or not they are on the loan.

In Community Property States, all liabilities are considered 50% responsibility of both spouses. Therefore, your spouse's debts may negatively affect your mortgage application.

For example, if you are applying for a government loan insured by the Federal Housing Administration (FHA) or the Veteran's Affairs (VA), your spouse's credit will need to be pulled and their debts added to your debt to income ratio (DTI).

Also, if your spouse has any business losses on your jointly filed tax returns, they will be counted against you.

Be sure to consider how your spouse might affect your mortgage application and be prepared to include them in the closing process, if needed.

Below is a List of Spousal States and Community Property States:

• Alabama
• Alaska
• Arkansas
• Colorado
• Florida
• Illinois
• Iowa
• Kansas
• Kentucky
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• New Hampshire
• New Jersey
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• South Dakota
• Tennessee
• Vermont
• West Virginia
• Wyoming

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

If you have any questions about how your spouse or anyone on the deed to your home will affect your mortgage application, please do not hesitate to contact one of our Personal Advisors.