Joint Mortgage Versus Joint Ownership: What’s the Difference?

Some people are in a position to buy a home without a co-borrower. They’re able to qualify for a loan using their own income and credit history. And when taking title of the property, they put the home in their name only.

Often though—especially in marriages and committed relationships—some people enter the home buying process together. And if so, they might apply for a joint mortgage and take title to the property as joint owners.

But while some people use the terms joint mortgage and joint ownership interchangeably, they’re not the same. Do you know the difference?

Here’s what you need to know about a joint mortgage versus a joint ownership.

What is a joint mortgage?

When applying for a mortgage loan, you have one of two options. You can apply for the home loan alone, or you can apply for the mortgage with another person.

There are benefits to both. One benefit of getting a joint mortgage is that both parties share responsibility for the mortgage, namely the mortgage payment. You’ll both apply for the mortgage by completing a joint application. At which point the mortgage lender reviews your income and credit scores to determine whether you qualify.

Some people apply for a joint mortgage because using their combined income can increase their qualifying amount, allowing them to buy a more expensive home. When applying for a home loan alone, you’ll qualify for a lesser amount.

Depending on the mortgage lender, up to three people might be able to apply for a mortgage together. This type of arrangement is common among couples. But you can also get a joint mortgage with a parent or sibling, and even friends have entered the mortgage process together.

There’s a downside to a joint mortgage, too. Remember, all parties are accountable and responsible for the payment. So if one person doesn’t pay their share, or if the person responsible for making the actual payment starts slacking, these actions can hurt everyone’s credit score.

What is joint ownership?

But even though multiple people can apply for a mortgage together, getting a mortgage doesn’t automatically mean joint ownership of the property. These are two separate things.

Ownership refers to the name that appears on the title. Ideally, if you put your name on a mortgage, you should also put your name on the title. This way, you’ll have ownership rights to the home. Joint ownership gives you a shared interest in the actual home. Therefore, the other borrower cannot refinance, sell or transfer ownership to another person without your permission.

Different banks have different rules. In some cases, if you’re applying for a mortgage with another person, some banks may require (or at least prefer) that both names appear on the title, which protects everyone involved. This, however, isn’t always required. So it is possible to apply for a joint mortgage with another person, yet exclude one person’s name from the title. This might happen when someone needs help qualifying for a mortgage, yet they’re the sole owner of the property.

But what if you don’t have a joint mortgage? Can you still title a property as joint ownership?

In this situation, the answer is yes.

Although some lenders might require a joint borrower to put their name on the mortgage title, there’s no rule that requires someone with joint ownership to have their name on the mortgage.

Let’s say you or your spouse applies for a mortgage alone—maybe because one earns enough to qualify for the loan or because one person has a better credit score. In this scenario, you can still take title to the property as joint owners, putting both spouses on the title.

This gives both parties ownership rights to the property, where one owner can’t sell or refinance without the other owner’s permission.

Final Word

Understanding the difference between a joint mortgage and joint ownership is crucial if you’re thinking about buying a home. This can help you decide whether it’s best to have one or both names on a mortgage, and it can guide how you decide to take title.

If you’re thinking about moving forward with a purchase or refinance, our expert loan advisors are ready to answer any questions you have. Give Blue Spot Home Loans a call today to start your mortgage journey.