We often receive phone calls from clients asking for assistance in transferring title to a home from multiple owners to a single owner or the opposite (Single Owner to multiple owners). Some examples would be a parent and child to child alone or from a Husband to a Husband and Wife (ie: Adding the Wife to title). Another common example is from Common Law couple to one of the parties alone. This is a seemingly simply process, yet something that requires a number of steps.
The first question we ask our clients in this situation is whether they have obtained the consent of the mortgage company to the transfer. In any situation where a party is being added to or removed from title to a property there must be a consent from the mortgage company who hold the mortgage on the property. The reason is that only parties qualified on a mortgage can be placed on title to the home. In other words, the mortgage company dictates who can be on title to a property based on who is qualified on the mortgage. As an example, if a young couple do not qualify to hold a mortgage on their own, they may have a parent co-sign with them in order to qualify. In this case, all 3 parties must be on the deed (ownership) to the home. In order to remove the co-signing parent, the bank must first consent to the transaction.
Another common example is where a non-married couple buy a home together. Upon breakdown of the relationship, the parties wish to remove one party from the ownership. In this case the mortgage company must consent to the transfer.
In some cases, the bank will simply provide a letter consenting to the party being removed from title. In other cases the bank will not consent and as such the co-signing party must remain on title until the renewal date of the mortgage.
In other cases the bank will require that an Assignment of Mortgage or Assumption of Mortgage agreement be executed after which the new deed can be prepared and registered. In other cases, the mortgage company will require that a new mortgage application be made by the individual in order to qualify them to hold title and the mortgage alone.
In any case, the consent of the mortgage company must be obtained before title can be transferred.
Mike Miller
Matlow, Miller, Cummins, Thrasher
519-621-2430