“Title Only” (On Title; Not On Loan); OK at Most Lenders

This is a reminder that almost all lenders allow spouses, partners, children, etc. to be on purchase contracts and therefore to be “on title” to a property, but not on the loan. This is called “title only.”

We commonly advocate this when a spouse or partner has little or no income, and/or credit issues that might adversely impact the financing.

For example, if Spouse-A is a student with a credit score of 670, and Spouse-B has all of the couple’s income and a credit score of 750, there is no reason to put Spouse-A “on the loan.” Spouse-A should be on title only, as Spouse-A’s credit score will increase the interest rate.

Note that with FHA Financing, both spouses’ debts must be included in the debt ratio analyses, even if only one spouse is on the loan.