The Mortgage Brothers Show
How Should You Hold Title? Community Property, Joint Tenancy, Tenants in Common, etc. What Does it All Mean?
In this post, we’re talking about what it means to hold title on a property and some different ways you might hold it. If you want to dig really deep into this, we suggest checking with legal counsel. We’re simply mortgage experts trying to answer some questions. It’s not an exhaustive list, but let’s dig into some common questions and scenarios.
What does it mean to hold title?
Holding title means you own the property. Being on the loan doesn’t mean you hold the title or that you actually own the property.
Holding title as a sole owner
This would mean that you’re holding the title all by yourself and that when you die it would be directed to wherever your estate designates to go. You would need to give instructions and you may have to set up a trust. This is a simple, straightforward way to hold a title.
Can you still hold title as a sole owner if you’re married?
You can still hold sole title as a married person. However, often the title company insuring the title will require that the other spouse specially relinquishes their right to the title establishing that both parties are okay with this situation.
What does it mean to hold a title with co-ownership
This means that the property is owned by two or more people.
Co-ownership as community property with rights of survivorship
If you’re in a community property state, you can take the title as a community property with rights of survivorship. The rights of survivorship means that if one of the owners dies, the deceased party’s ownership is automatically transferred to the surviving owner. This is the same if there are more than two owners. If the third dies, and there is a right of survivorship, the other two would receive the third party’s share.
Holding Title as Joint Tenants
This is another type of co-ownership. This is a type of property ownership by two or more people who don’t necessarily have to be married. However, they do need to own the property in equal interests. For example, if there are ten people on the title, you’d all need to have a 10% stake in the title. What’s cool with joint tenancy is that you can each separately convey your ownership to whoever you want, depending on the agreements of the tenancy. It’s also possible, if you want to, do this with rights of survivorship.
Tenancy in common
This is ideal for people who are buying for investment or the like. If someone puts up a lot of money and one person owns, say, 80%, and then you could have, say, ten other people who each own 2%. This is the most autonomous way to own property. You can sell it by yourself. You don’t have to get anyone’s permission. However, you can’t sell the whole property, just your share in it.
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Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.